The evolution of corporate cash

Journal Article (Journal Article)

We study time-series and cross-firm variation in corporate cash holdings from 1920 to 2014. The recent increase in cash is not unique in magnitude. However, the recent divergence between average and aggregate cash is new and entirely driven by a shift in cash policies of newly public firms, whereas within-firm changes have been negative or flat since the 1940s. Cross-sectional relations between cash holdings and firm characteristics are stable throughout the century, though characteristics explain little of the trends in aggregate cash. Macroeconomic conditions, corporate profitability and investment, and (since 2000) repatriation taxes explain aggregate cash over the last century.

Full Text

Duke Authors

Cited Authors

  • Graham, JR; Leary, MT

Published Date

  • November 1, 2018

Published In

Volume / Issue

  • 31 / 11

Start / End Page

  • 4288 - 4344

Electronic International Standard Serial Number (EISSN)

  • 1465-7368

International Standard Serial Number (ISSN)

  • 0893-9454

Digital Object Identifier (DOI)

  • 10.1093/rfs/hhy075

Citation Source

  • Scopus