Abstract
This research aims to know the effect of financial knowledge on firm performance; the role of financial behavior and access to finance as mediation and the role of financial risk attitude as moderation. The object of this research is the owner of small-medium enterprises, sector food and beverage in Malang. Data collection was carried out using a questionnaire of 150 respondents. Data analysis of this research uses partial least square (PLS). The finding indicates that financial knowledge has a positive and significant effect on firm performance; financial behavior mediates the relationship of financial knowledge dan firm performance; while access to finance doesn’t mediate the relationship of financial knowledge with firm performance. This research also found that financial risk attitude weakens the relationship of financial knowledge with financial behavior.
Highlights
Financial knowledge refers to “understanding”, one of the dimensions of financial literacy (Huston, 2010), which explains that the level of financial knowledge of SME owners significantly influences the performance of SMEs or businesses (Adomako et al, 2016; Eniola & Entebang, 2015; Games & Rendi, 2019; Lusardi et al, 2017; Tuffour et al, 2020; Ye & Kulathunga, 2019)
The same results were investigated by Lusardi & de Bassa Scheresberg, (2015) which showed that if the amount of borrowing with high costs indicated that the borrower's level of financial literacy was very low, due to a lack of knowledge of basic financial concepts, and this would affect the level of performance in a business. business, while in another study it was stated that financial literacy with financial knowledge dimensions was reported to have no significant effect on sustainability (Kaban & Safitry, 2020), so there were research inconsistencies
The R2 value of the Access to Finance variable is 0.161 (Table 3) explaining that Access to Finance is influenced by financial knowledge as much as 16.1%, while the remaining 83.9% is the contribution of other variables not explained in this study
Summary
Financial knowledge refers to “understanding”, one of the dimensions of financial literacy (Huston, 2010), which explains that the level of financial knowledge of SME owners significantly influences the performance of SMEs or businesses (Adomako et al, 2016; Eniola & Entebang, 2015; Games & Rendi, 2019; Lusardi et al, 2017; Tuffour et al, 2020; Ye & Kulathunga, 2019). A. Eniola & Entebang (2015) obtain results if there is a very strong relationship between the knowledge base and the performance of SMEs because the financial knowledge possessed by SME owners helps them make the right financial decisions. The same results were investigated by Lusardi & de Bassa Scheresberg, (2015) which showed that if the amount of borrowing with high costs indicated that the borrower's level of financial literacy was very low, due to a lack of knowledge of basic financial concepts, and this would affect the level of performance in a business. business, while in another study it was stated that financial literacy with financial knowledge dimensions was reported to have no significant effect on sustainability (Kaban & Safitry, 2020), so there were research inconsistencies
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