Perhaps tax strategy explains some of the cash-holding, if the cash is held offshore to comply most cost-efficiently with tax law.

I remember hearing an interview with Tim Cook on NPR a few months ago. Apple has something like $150 billion in cash reserves, most of it offshore. Cook definitely claimed that taxes were the sole reason Apple won't repatriate that money. However, the author of this article says taxes can only explain part of the holdings.

I know the one thing that the CEOs and CFOs always cite is uncertainty. Democrats and Republicans keep talking about overhauling the corporate tax structure, but they can never agree on how. Thus, corporations sense that change is coming, but don't know in which direction things will move. My guess is that a lot of the cash hoarding has to do with fear of being caught with their pants down when the new rules finally materialize. Discouraging investment may be one specific way that political dysfunction harms the economy (provided we're agreeing that sitting on cash, as opposed to investing it in employees, capital goods, etc is generally harmful to the economy).