Demand for cash: an econometric model of currency demand in India

Tagat, Anirudh; Trivedi, Pushpa

doi:10.1080/17520843.2020.1722193

Cited by 6 publications

(3 citation statements)

References 53 publications

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“…Key factors here are economic development and advancements in information and communication technologies (ICT) [34]. Another commonly indicated determinant is the shadow economy [5,35,36], while Goczek and Witkowski point out the importance of trust for the choice of e-payments [33]. Some papers mention macroeconomic stability as another relevant factor.…”

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confidence: 99%

Precautionary Demand for Cash and Perceived Risk of Electronic Payments

Pietrucha

Maciejewski

2020

Sustainability

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We have recently seen two conflicting trends in the use of cash. The share of e-payments in retail transactions is steadily increasing, but the same upward trend is true for the share of cash in circulation or at least the cash share remained unchanged. This paper shows the significance of perceived risk for consumers’ precautionary demand for cash after they make a decision to use e-payments. We use data from a study involving Polish consumers. The main conclusions are as follows: surveyed consumers perceive a level of risk associated with card and mobile payments and continue to carry cash for precautionary reasons. Factors such as the consumer’s mental state, lack of trust in e-payments, and attitude to risk influence the decision to maintain cash reserves, while the consumer’s income and age may be considered the main determinants of the value of the cash reserve. Consequently, the decision to use e-payments does not necessarily mean that the demand for cash drops to zero. A degree of difficult-to-reduce, autonomous demand for cash may exist independent of the traditionally studied determinants, in particular, those related to the transaction demand.

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confidence: 99%

Precautionary Demand for Cash and Perceived Risk of Electronic Payments

Pietrucha

Maciejewski

2020

Sustainability

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“…Chodorow-Reich et al (2020: 57, 59) endorse this, arguing that in India cash plays a special role in facilitating transactions and economic activity. Tagat and Trivedi (2020) now report, based on RBI data, that ‘currency in circulation has not only returned to pre-demonetization levels but has exceeded it’.…”

Section: Contextualised Literature Reviewmentioning

confidence: 99%

Demonetisation, Banking and Trust in ‘Bricks’ Or ‘Clicks’

Adil

Hatekar

2020

South Asia Research

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This article seeks to advance contextualised understanding of the extent to which a cashless economy in India can be a feasible developmental goal. Initially, impressed with critiques of the sudden ‘demonetisation’ on 8 November 2016, we conducted econometric research to test how banks (‘bricks’) could be brought closer to rural people. However, this traditional approach of envisaging more banks was rapidly overtaken by the massive uptake of digital payment methods (‘clicks’) in India since 2016. Partly driven by the Reserve Bank of India (RBI), this has raised new concerns and research agenda focused on people’s trust in banking and new technologies, consumer skills and people’s basic rights vis-à-vis a state that, controversially, now seems to be seeking more control within a relentlessly changing postmodern scenario.

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“…Some argued that the process of demonetization had an adverse impact on the informal and unorganized sector (Ghosh, 2017; Roy, 2019). However, the positive arguments for demonetization towards the economy were regarding demonetization enabling consumers to switch to digital payments (Aggarwal & Gupta, 2019; Bhukuth & Terrany, 2019; Verma et al, 2019) and reduced scope of the proliferation of shadow economy, which often acted as a drag in the formal economy growth (Tagat & Trivedi, 2020). GoI policymakers did significant thinking about the fact that the Indian economy was beset with institutional voids (Manikandan & Ramachandran, 2015).…”

Section: Introductionmentioning

confidence: 99%

Effect of Demonetization on Advertising, Research & Development and Human Resource Intensities and its Impact on Firm’s Performance

Bhattacharyya

Nemana

2021

Vision: The Journal of Business Perspective

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Investing in advertising, research and development (R&D) and human resource management and development (HRMD) enabled firms to achieve competitive advantage and improve profitability. Indian economy witnessed the event of ‘Demonetization’ in November 2016 that created short term cash shortage. The study aimed at understanding the relationship of advertising, R&D and HRMD intensities on firm performance (proxied with return on assets). The effects of demonetization on these variables were explored. Financial data of listed Indian firms, over the years 2014–2019 was collected from CMIE Prowess database for the analysis using fixed effects panel-data regression. Results indicated significant positive relationship between R&D and advertising intensity with firm’s performance pre-demonetization, while reduced effect post-demonetization. HRMD intensity had a negative relationship pre as well as post-demonetization on firm’s performance. The results provided insights for managers and decision-makers on the impact of cash resource allocation on R&D, HRMD and advertising expenditures in creating firm value.

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Demand for cash: an econometric model of currency demand in India

Cited by 6 publications

References 53 publications

Precautionary Demand for Cash and Perceived Risk of Electronic Payments

Precautionary Demand for Cash and Perceived Risk of Electronic Payments

Demonetisation, Banking and Trust in ‘Bricks’ Or ‘Clicks’

Effect of Demonetization on Advertising, Research & Development and Human Resource Intensities and its Impact on Firm’s Performance

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