Abstract
We investigate the impact of the Demonetization of 85% currency in circulation in India on the eve of 8 November 2016 on all the listed stocks spanning over 20 broad industry clusters (sectors) and...
Highlights
The government of India, in a historic decision, on the night of 8 November 2016 announced the replacement of its 86% currency in circulation by banning the existing currency of INR 500 and 1000 (RBI Report 2018, https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/2ECONOMIC88A5 CC5468FA4639A767862F5921304A.PDF)
The present study evaluates the impact of demonetization on Indian stock market—a barometer of the health of the economy—and seeks to evaluate such impact on various Industry clusters, and firms based on their affiliation type in India
This paper attempts to study the impact of demonetization on all the listed stocks spanning over 20 broad industry clusters and their affiliation type from the Indian economy over the period of November to Mid-January 2016
Summary
The government of India, in a historic decision, on the night of 8 November 2016 announced the replacement of its 86% currency in circulation by banning the existing currency of INR 500 and 1000 (RBI Report 2018, https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/2ECONOMIC88A5 CC5468FA4639A767862F5921304A.PDF). The rationale put forth by the Government sources for such a bold move was to tackle with the black money problem, counterfeit currency, corruption, checking the terror funding and money laundering and forced adoption of the online transaction by the citizens of the country (Singh, 2018). The new currency notes of INR 2000 differed considerably from the existing notes in terms of size and shape This lead to the need of recalibration of ATMs. As the demonetization was a sudden move, there was no time for recalibration of ATMs, leading to increase in the agitation of citizens of India who were in dire need of money. This paper attempts to study the impact of demonetization on all the listed stocks spanning over 20 broad industry clusters (sectors) and their affiliation type from the Indian economy over the period of November to Mid-January 2016. Normal returns were predicted for the event window based on the historical return values of the estimation window observations and an expected return was calculated for each firm which was subtracted
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
