Moreover, to the extent that firms can use other liquid assets besides cash in the event of cash shortage. These assets can be seen as substitutes for cash. Consequently, firms with more liquid asset substitutes are expected to hold less cash. We expect that there is a negative relation between liquid assets and cash holdings, as has been shown in various empirical studies (Opler et al.. 1999: Ozkan and Ozkan. 2004: Guney et al.:2003: Ferreira and Vilela :2004: Drobetz and Gruninger .2006).