Bhavya Aggarwal, Nirupama Kulkarni, S. Ritadhi, Abhay P. Aneja, P. Bardhan, A. Basu, Pallavi Chavan, D. Mukherjee, P. Mukherjee, Abhinav Narayanan, Satish Rath, R. Ravikumar, Raghuram Rajan, A. Srinivasan, Carly Trachtman
{"title":"Cash Is King: The Role of Financial Infrastructure in Digital Adoption","authors":"Bhavya Aggarwal, Nirupama Kulkarni, S. Ritadhi, Abhay P. Aneja, P. Bardhan, A. Basu, Pallavi Chavan, D. Mukherjee, P. Mukherjee, Abhinav Narayanan, Satish Rath, R. Ravikumar, Raghuram Rajan, A. Srinivasan, Carly Trachtman","doi":"10.1093/rcfs/cfad018","DOIUrl":null,"url":null,"abstract":"\n This paper examines whether a one-time, extensive, but temporary shock to cash supply can affect the adoption of digital payments. We exploit the 2016 demonetization episode in India, which overnight discontinued 86% of cash in circulation. Using novel administrative data from retail debit card transactions, we identify a 12% increase in digital payments in areas adversely affected by the cash shortage, which persisted well after the restoration of cash supply. Examining mechanisms, we find a limited role for social networks and stronger support for learning by doing. Further, information frictions hinder the immediate adoption of digital payments.","PeriodicalId":44656,"journal":{"name":"Review of Corporate Finance Studies","volume":"52 1","pages":""},"PeriodicalIF":1.9000,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Corporate Finance Studies","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1093/rcfs/cfad018","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 3
Abstract
This paper examines whether a one-time, extensive, but temporary shock to cash supply can affect the adoption of digital payments. We exploit the 2016 demonetization episode in India, which overnight discontinued 86% of cash in circulation. Using novel administrative data from retail debit card transactions, we identify a 12% increase in digital payments in areas adversely affected by the cash shortage, which persisted well after the restoration of cash supply. Examining mechanisms, we find a limited role for social networks and stronger support for learning by doing. Further, information frictions hinder the immediate adoption of digital payments.
期刊介绍：
The Review of Corporate Finance Studies (RCFS) is dedicated to publishing high-quality research in the expansive field of Corporate Finance. The journal seeks original contributions, reviewing papers based on their unique insights into Corporate Finance. This encompasses a wide spectrum, including a firm's interactions with stakeholders, capital markets, internal organization structure, compensation mechanisms, corporate governance, and capital management. RCFS also welcomes research in financial intermediation, financial institutions, microstructure, and the implications of asset pricing for Corporate Finance. The journal considers theoretical, empirical, and experimental papers for review.
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