Does Firm Age Affect Cash Policies?

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