This paper identiffes culture as an important factor affecting corporate cash holdings by using China and its national culture, Confucianism, as the setting. We find that firms located in regions with stronger Confucian culture hold persistently higher levels of cash. We employ an instrumental variable to draw causal inference. The culture effect is stronger for more ffnancially-constrained and riskier ffrms, suggesting precautionary motives as the underlying mechanism. We ffnd that the culture effect remains intact after controlling for corporate governance heterogeneity, which rules out the agency motives. Lastly, ffrms’ operating performance indicates that high cash holdings is an efffcient outcome.