This dissertation studies the impact of financial constraints on Mexican companies' demand for liquidity and investment decisions, by examining a large sample of Mexican firms over the period 1990-2006. The effect of financial constraints is captured by the firms' propensity to save cash out of cash flows (the cash flow sensitivity of cash). In Mexican firms, financially constrained firms' cash holdings are positively related to their internal funds, as expected. But also, financially unconstrained firms exhibit significant cash-cash flow sensitivity. An index is constructed to measure the level of financial constraint for Mexican firms listing in Bolsa Mexicana de Valores.