Unlocking the nexus: exploring the mediating and moderating dynamics of risk factors in economic literacy for organizational performance - A systematic review

Abstract

PurposeRecognizing economic literacy as a vital form of intellectual capital provides essential tools to mitigate the adverse impact of risk factors on business organizations' performance. This recognition serves as a strong rationale for prioritizing economic literacy as a strategic asset in navigating the complexities of risk factors for sustained organizational performance. To bridge this gap, this study examines the role of risk factors in the economic literacy of an organization and how they affect organizational performance.Design/methodology/approachThis exploratory study employed a qualitative research method, utilizing a systematic review with the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) approach to identify gaps. A comprehensive search across databases was conducted using keywords related to risks, economic literacy and organizational performance. In total, 32 articles were meticulously analyzed, focusing on methodology, results and discussion sections to address research questions.FindingsThis study highlights the impact of risk factors on economic literacy and organizational performance, focusing on risk-taking, attitude, enterprise risk management (ERM), financial literacy and organizational performance. It reveals that possessing economic literacy can mitigate financial risks in corporations by helping entrepreneurs identify business opportunities and pitfalls, enabling informed and prudent financial decision-making. Conflicting findings challenge existing knowledge on the link between risk factors and financial literacy, particularly in new product development decisions, highlighting the need for further investigation into environmental factors shaping this connection.Originality/valueThe study developed a conceptual model that explains the interaction among economic literacy, risk factor and organization performance, which has implications for the development of the required intellectual capital to mitigate the impact of risk factors. Also, the study identified diverse conceptual, methodological and geographical gaps that will provide direction for future studies. Future research could delve into firm-level or cross-country data via surveys, interviews or focus groups, enriching the research's robustness and depth for nuanced insights into the investigated relationships.