Does Firm Age Affect Cash Policies?

Posted: 14 Feb 2019

See all articles by Rajeeb Poudel

Rajeeb Poudel

Western Oregon University

Haowen Luo

Purdue University Fort Wayne; Indiana University Purdue University Fort Wayne

Ravi Jain

University of Massachusetts Lowell

Date Written: January 15, 2019

Abstract

This study investigates the linkages between firm age and cash holdings. We document that younger firms save more cash from their cash flows, while we do not find any systematic cash saving pattern for older firms. This linkage is robust to controlling for firm size, and other control variables known to affect cash policy. Our finding is consistent with the idea that younger firms face more financing frictions than older firms and hence have stronger need to save cash.

Keywords: Firm Age, Young Firms, Old Firms, Cash Policy, Corporate Liquidity, Corporate Policies, Corporate Finance

JEL Classification: G31, G32

Suggested Citation

Poudel, Rajeeb and Luo, Haowen and Jain, Ravi, Does Firm Age Affect Cash Policies? (January 15, 2019). Available at SSRN: https://ssrn.com/abstract=3328124

Rajeeb Poudel (Contact Author)

Western Oregon University ( email )

Monmouth, OR 97361
United States
97361 (Fax)

Haowen Luo

Purdue University Fort Wayne ( email )

2101 E. Coliseum Blvd.,
Neff 350
Fort Wayne, IN IN 46805
United States

Indiana University Purdue University Fort Wayne ( email )

2101 E Coliseum Boulevard East
Fort Wayne, IN 46805-1499
United States

Ravi Jain

University of Massachusetts Lowell ( email )

Lowell, MA 01854
United States

HOME PAGE: http://www.uml.edu

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