The automobile industry is one of the most crucial industries in the modern global economy, encompassing numerous suppliers and logistics firms. Despite its strong influence and importance, the automobile industry has been plagued with numerous environmental concerns and criticism. For these reasons, many companies have sought to conduct Corporate Social Responsibility (CSR) to reduce their environmental impact. One of the main ways to do this is by way of reducing the amount of chemicals they release. From this, we investigate the effect of CSR and the amount of chemicals released on cash holdings for automobile firms. The results show that companies with higher levels of CSR and lower chemical releases hold less cash, which is consistent with the Precautionary Motive of Cash Holdings Theory. The results of this research have profound implications on improving automobile firms' business strategies, environmental policies, and investing practices. In summary, this research contributes to the literature on corporate cash holdings by incorporating a direct and unbiased environmental impact component with CSR to provide a unique theoretical framework to analyze the automobile industry.

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