The rising stockpile of cash as a share of total assets at U.S. firms has intrigued economists since at least the paper of Bates, Kahle, and Stulz (2006), yet there has been relatively little work on where this cash has come from and how it is related to investment performance. We exploit...

We exploit Statement of Cash Flows data from Compustat to decompose firms' cash stocks by source and show that the rise in cash holdings since the late 1980s was driven by externally generated cash until 2000, and by internally generated cash afterwards. Firms stockpiling externally generated...