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

The article examines the impact of advertising intensity, research and development (R&D) intensity, and human resource management and development (HRMD) intensity on the performance of Indian firms, measured by return on assets (RoA), with a particular focus on changes before and after the 2016 demonetization event. Using financial data from 189 listed Indian firms between 2014 and 2019 and applying fixed-effects panel-data regression, the study finds that both R&D and advertising intensities had a significant positive effect on firm performance prior to demonetization, but their influence weakened afterward. Conversely, HRMD intensity showed a negative relationship with firm performance both before and after demonetization. The findings highlight the short-term cash constraints induced by demonetization, which affected firms’ investment in innovation, advertising, and human resource development, offering insights for managers and policymakers on resource allocation during economic disruptions.