We examine the relation between the level of trust in a country and corporate cash holdings. Agency theories predict that shareholders in countries with low levels of societal trust will pressure firms to disgorge cash. Precautionary savings motives predict that firms located in countries with less trusting societies will hoard more cash in order to compensate for reduced access to capital markets. The first theory predicts a positive relation between trust and corporate cash holdings while the second theory predicts a negative relation between these two variables. Using data on firms located in 54 countries around the world we find evidence in favor of the agency theory-based explanation for the relation between trust and corporate cash holdings. Overall, our results highlight the role played by informal institutions in shaping corporate financial management.