  We study the short distance (large momentum) properties of correlation
functions of cascading gauge theories by performing a tree-level computation in
their dual gravitational background. We prove that these theories are
holographically renormalizable; the correlators have only analytic ultraviolet
divergences, which may be removed by appropriate local counterterms. We find
that n-point correlation functions of properly normalized operators have the
expected scaling in the semi-classical gravity (large N) limit: they scale as
N_{eff}^{2-n} with N_{eff} proportional to ln(k/Lambda) where k is a typical
momentum. Our analysis thus confirms the interpretation of the cascading gauge
theories as renormalizable four-dimensional quantum field theories with an
effective number of degrees of freedom which logarithmically increases with the
energy.
