In this study of 57 stock markets outside the U.S. over 2001-2018, we examine the cash savings behavior of equity issuers and seek to identify firm- and country-level factors that shape (the value of) those savings. On average, non-U.S. equity issuers retain approximately 33 percent of their issue proceeds in cash, but their cash ratio drops sharply in the post-issue years. The rapid drop in the postissue cash ratio comes primarily from equity issuers’ fast growth, rather than from depletions of saved cash. Our evidence suggests that firms stock up on cash with equity issuance to support their post-issue business expansion, rather than to hoard cash. Our evidence also suggests that strong country-level governance—such as control of corruption and shareholder protection—enhances the value of cash because such governance helps channel an economy’s capital to fast-growing firms that execute their growth options with equity issuance.​ 

JEL classification: F30, G32, G34

Key words: Equity issuance, cash savings, the value of cash, governance, investor protection​