This paper analyses the relationship between cash holdings and performance, considering the moderating effect of corruption that exists in the institutional context in which firms operate. The results show the importance of corruption in shaping the sign and the in- tensity of the  value of cash holdings. The sign of the effect of corporate liquidity on firm performance changes according to varying levels of corruption. Holding cash is shown to have a noteworthy and no marginal role in supporting business activities and points to an avenue of investigation for future research