Role Of Financial Literacy Research Articles

The role of financial literacy in reducing financial distress: What if consumers were perfectly financially literate?

AbstractUsing longitudinal data from the Panel Study of Income Dynamics (PSID), this study examines the extent to which financial literacy can mitigate financial distress. Employing a “what if” analysis, we simulate the effect of maximizing financial literacy on the likelihood of experiencing financial distress. We show that raising financial literacy to its highest level could prevent financial distress for a group of households facing moderate financial distress. Our results also imply that financial literacy is not a panacea for consumers' financial problems as those facing high risk of financial distress seem to be not affected by financial literacy. Interventions beyond financial literacy might be needed to effectively address financial distress.

The Role of Financial Literacy in Enhancing Entrepreneurial Competencies Among Business Education Students in Nigerian Colleges of Education

The Role of Financial Literacy in Enhancing Entrepreneurial Competencies Among Business Education Students in Nigerian Colleges of Education

Enhancing life satisfaction through financial literacy and behavior: Insights from the Indian IT sector

In the ever-evolving and complex global work environment, the pursuit of overall life satisfaction has emerged as a critical concern for employees. Drawing from Social Cognitive and Self-Efficacy Theory, this study aims to investigate the interplay of the influence of Financial Literacy (FL) and Financial Behavior (FB) on employees’ Satisfaction with Life (SWL), along with the mediating role of Financial Self-Efficacy (FSE) in context of Indian IT sector. A cross-sectional quantitative research approach has been adopted; data from 310 employees were collected through structured questionnaires and analyzed using PLS through SmartPLS4.0 software. The findings exhibit that financial literacy and financial behavior have positive impact on satisfaction with life, and financial self-efficacy partially and completely mediates the FL-SWL and FB-SWL relationship respectively highlighting the pivotal role of FL and FB via FSE in bolstering employees’ life satisfaction. Considering the mainstream literature on employees’ SWL, the study findings suggests that regulatory bodies should prioritize integrating financial literacy into education and workplace training along with policymakers ensuring equal access to financial services to foster a financially empowered and satisfied workforce.

What drives problematic Bitcoin investment behavior?: The role of financial literacy

PurposeAlongside its remarkable growth, problematic Bitcoin investment (BI) behavior and its associated negative consequences have become prevalent, and only a few studies have examined it. Therefore, this study aims to examine problematic BI behavior by investigating its specific antecedents and consequences and identifying which antecedents were more influential in it. In addition, we also examine the role of financial literacy on the relationship between the antecedents and problematic BI behavior.Design/methodology/approachWe collected survey data from 413 investors with Bitcoin investment experience in 2018, when a Bitcoin frenzy occurred. The partial least squares method was used to test the proposed research model.FindingsThe results show that prudent, negative urgency, overexpectation and sensation seeking are positively associated with problematic BI behavior, while restraint is negatively associated. Problematic BI behavior is negatively related to investor well-being. Our findings also indicate that both objective and subjective financial literacy moderate the relationship between the antecedents and problematic BI behavior. Four types of investors in terms of their objective and subjective Bitcoin knowledge show different patterns in the relationship between the antecedents and problematic BI behavior.Originality/valueThis study offers insights for researchers by providing a deeper understanding of the contextual antecedents of problematic BI behavior and the role of financial literacy in it. This study provides detailed implications for financial institutions, policymakers, and regulators to guide rational Bitcoin investment behaviors.

Role of Perceived Security and Financial Attitude in Shaping Behavioral Intention under the Moderation of Financial Literacy

The study was conducted to investigate the role of consumer behavior in stimulating the intention to adopt e-banking services under the moderation of financial literacy. Further it aimed at gaining an in-depth view of the factors that lead to e-banking implementation, such as perceived security, financial attitude, and financial literacy. Using a deductive approach, the study collected data through a structured questionnaire given to 140 internet banking users in Lahore, who had been sampled using a convenience sampling method. Structural equation modeling was utilized to investigate the research hypotheses and to examine customer behavior and levels of financial literacy. The investigation throws much emphasis on the role of financial literacy as a moderating variable in technology adoption models. By explaining its significance in the acknowledgement of e-banking services, the research provides meaningful insights into consumer behavior within the realm of digital banking, therefore aiding in the formulation of successful strategies for e-banking adoption. Findings indicate that security perception, financial attitude, and financial literacy directly impact the intention to use an online banking service. With higher financial literacy, better financial attitudes will contribute positively to the adoption of e-banking, and improving the financial knowledge of customers will act as a stimulating agent for the usage of e-banking services.

The Role of Financial Literacy and Financial Behavior on Student Investment Decisions

This study aims to see how financial literacy and financial behaviour can affect investment decision making for university students. Methods: This study is a quantitative study. Sample determination using purposive sampling method with a total of approximately 200 people. Data collection is using a questionnaire with a Likert scale (1-5). The results of obtaining data from the questionnaire will be analysed using descriptive data analysis techniques and processed using SEM PLS software. Results: the results of the above research state that financial literacy and financial behaviour have a significant effect on investment decisions in college students. The Investment Decision Variable can be explained by Financial Literacy and Financial Behaviour by 51%.

The Impulse Buying Behavior: The Role of Financial Literacy, Perceived Usefulness, Perceived Ease of Use, And Security of E-Wallets (Case Study At Mercu Buana University Students)

The Impulse Buying Behavior: The Role of Financial Literacy, Perceived Usefulness, Perceived Ease of Use, And Security of E-Wallets (Case Study At Mercu Buana University Students)

The Influence of Financial Knowledge and Locus of Control on Financial Management Behavior with Financial Literacy as an Intermediary : A Case Study on Generation Z Students Using ShopeePay on Java Island

This study explores the effects of financial knowledge and locus of control on financial management behavior, with financial literacy as a mediating variable, among Generation Z students using ShopeePay in Java Island. Involving 387 students, the research employs SEM-PLS 3 for data analysis and utilizes a snowball sampling method for questionnaire distribution. The findings reveal that both financial knowledge and locus of control significantly influence financial literacy and financial management behavior. Financial literacy mediates the relationship between financial knowledge and financial management behavior, enhancing the impact of financial knowledge on financial decision-making. Similarly, financial literacy mediates the relationship between locus of control and financial management behavior, reinforcing the effect of locus of control on effective financial management. The results indicate that while both financial knowledge and locus of control positively affect financial management behavior, the presence of financial literacy amplifies these effects. The study contributes to understanding how financial knowledge and locus of control, supported by financial literacy, influence financial management practices among students, offering insights into the role of financial literacy in bridging these relationships.

Finances and Future Health

First-generation college students experience disproportionate levels of stress, anxiety, and lack of preparation for undergraduate education in comparison to their multi-generational peers in relation to their levels of financial support and literacy. This impacts on their levels of resiliency, their physical and mental wellbeing, academic success, and levels of attrition. This not only has impacts on their health and wellbeing in the present, but can also negatively impact both their health and their career trajectory in the future as well. Using a 2-phase approach, researchers collected both quantitative and qualitative data related to how first-generation EOF students think about the role of financial literacy, and in particular Federal Work Study, as a component of their current and future health status and academic success. Qualitative analysis gave rise to 3 themes related to student feelings of stress, pressure/obligation, lack of preparation, and uncertainty about the role of college education in their current and future lives. Findings are shared in order to better inform and guide institutions of higher education on how to best educate and support their first-generation students, particularly in how to aid these students in improving their financial literacy and financial support to improve resiliency, wellbeing, and academic success.

Preferences for ethical intermediaries and sustainable investment decisions in micro-firms: The role of financial literacy and digital financial capability

This study analyses the effects of financial literacy and digital financial capabilities in shaping entrepreneurs’ preferences for ethical financial intermediaries and sustainable investment decisions. Exploiting novel survey data on Italian micro-enterprises, we find that more financially literate business owners have higher preferences for intermediaries with a strong ethical stance, are more likely to make investments inspired by environmental and social criteria and have a higher awareness of sustainable financial products. Moreover, digital financial competencies are found to play a significant role in enhancing preferences for ethical intermediaries and sustainable investment decisions. Finally, we show that the beneficial effect of financial literacy is mostly direct, while the indirect effect operating through higher digital financial abilities, despite being statistically significant, impacts firms’ sustainable financing and investing decisions only to a lower extent.

Role of Financial Literacy, Risk Perception, and Investment Experience in Investment Decisions of Millenial and Z Generation in Jabodetabek

Role of Financial Literacy, Risk Perception, and Investment Experience in Investment Decisions of Millenial and Z Generation in Jabodetabek

The role of financial literacy, digital literacy, and financial self-efficacy in FinTech adoption

The primary aim of this study is to delve into the factors influencing individuals’ readiness to embrace financial technology (FinTech) services in Bangladesh. Specifically, the study focused on Bangladeshi fintech consumer’s knowledge about contemporary digital financial tools, such as mobile-based payment service apps. Data collection was carried out using a survey questionnaire tailored to the Bangladeshi context. Participants were invited to participate in the survey, and their responses were gathered upon their consent. A five-point Likert scale, ranging from ‘1’ for ‘Strongly Disagree’ to ‘5’ for ‘Strongly Agree,’ was employed to gauge the questionnaire items. The final sample size was 450 respondents. To assess the hypotheses, a 5% significance level was employed, with data analysis conducted using SPSS software. The findings underscore a positive and statistically significant impact of financial literacy, digital literacy, and financial self-efficacy on the adoption of FinTech services in Bangladesh. Collectively, these variables elucidate 48.20% of the variance (R2=0.482) in predicting individuals’ adoption behavior of FinTech. Financial self-efficacy (β = 0.574; t-value = 8.394) has the highest effect on FinTech adoption compared to the other two factors. Additionally, a substantial correlation coefficient (r=0.634) is present between digital literacy and FinTech adoption. This study contributes to the extant literature on FinTech services by providing valuable insights that enhance scholars’ understanding of the emerging financial technologies’ significance and their predominant impacts within the Bangladeshi FinTech ecosystem. These findings hold implications for policymakers, financial institutions, and stakeholders seeking to promote FinTech adoption and foster financial inclusion in Bangladesh.

Navigating the Digital Financial Landscape: The Role of Financial Literacy and Digital Payment Behaviorin Shaping Financial Management Among Generation Z Student

Navigating the Digital Financial Landscape: The Role of Financial Literacy and Digital Payment Behaviorin Shaping Financial Management Among Generation Z Student

Indonesian Millennial’s Financial Behaviour: The Role of Financial Literacy in Intention to Use Fintech Lending

The significance of financial behaviour among millennials, particularly concerning fintech lending, is important. Fintech lending is a complex subject that is increasingly being studied. However, it also provides a solution for quick and easy funds. This study proposes to notice the financial behaviour of millennials by looking at their financial literacy and how it affects their plan to use fintech lending. The study practices a quantitative research approach and gathered data from 359 respondents through purposive random sampling. Structural equation modelling was used to test the hypotheses. The study found that the variables of the theory of planned behaviour do not directly affect the intention to use fintech, on the other hand, financial literacy has a significant influence. The consequences of this study are useful for investors, financial institutions, and government officials since it emphasises the necessity of knowing millennials' financial behaviours. These behaviours can impact their product choices, as seen in their susceptibility to the FOMO syndrome

The role of financial literacy in consumer financial fraud exposure (via email) and victimisation: evidence from Spain

PurposeThe ongoing evolution of the Internet and the subsequent digitalisation of financial services, along with the ever-increasing innovation of financial products, have rendered consumers more vulnerable to a wider range of fraud in the banking sector and, particularly, to consumer financial fraud (CFF). This paper aims to analyse the factors that may contribute to CFF exposure and victimisation among Spaniards, with a special focus on financial literacy.Design/methodology/approachThis paper provides a comprehensive overview of leading publications on the topic, followed by empirical analyses using regression models with a sample of 6,207 Spanish individuals drawn from the Survey of Financial Competences.FindingsObjective and subjective financial knowledge are positively correlated with CFF exposure via email but do not protect against CFF victimisation. Similarly, financial knowledge overconfidence is positively related to the former but fails to constitute a driver of the latter. Financial inclusion, measured by the number of financial products held, not only increases the risk of this exposure but also contributes to its subsequent victimisation.Originality/valueTo the best of the authors' knowledge, no previous paper has analysed the relationship between CFF and financial literacy by differentiating two types of vulnerabilities to fraud (exposure and victimisation) while considering different constructs of financial literacy. Dissecting these two domains may explain why the same financial literacy construct can have different effects at both stages of financial fraud and, furthermore, how different financial literacy constructs may affect the same stage of financial fraud.

A Role Of Financial Literacy In Financial Investment Decisions Of Teachers Of Higher Education Institutions In Pune Region

A Role Of Financial Literacy In Financial Investment Decisions Of Teachers Of Higher Education Institutions In Pune Region

Knowledge creates value: the role of financial literacy in entrepreneurial behavior

Under the backdrop of economic globalization and the digital economy, entrepreneurial behavior has emerged not only as a focal point of management research but also as an urgent topic within the domain of family finance. This paper scrutinizes the ramifications of financial literacy on household entrepreneurial behavior utilizing data from China’s sample of the China Household Finance Survey spanning the years 2015 and 2017. Employing the ordered Probit model, we pursue our research objectives. Our findings suggest that financial literacy exerts immediate, persistent, and evolving positive effects on households’ engagement in entrepreneurial activities and their proclivity toward entrepreneurship. Through the mitigation of endogeneity in the regression model, the outcomes of the two-stage regression corroborate the primary regression results. An examination of heterogeneity unveils noteworthy disparities between urban and rural areas, as well as gender discrepancies, in how financial literacy influences household entrepreneurial behavior. Furthermore, this study validates three potential pathways—namely income, social network, and risk attitude channels—demonstrating that financial literacy significantly augments household income, expands social networks, and enhances risk attitudes. Moreover, through supplementary analysis, we ascertain that financial education amplifies the impact of financial literacy on entrepreneurial behavior. Our study contributes to the enrichment of human capital theory and modern entrepreneurship theory. It advocates for robust efforts by governments and financial institutions to widely disseminate financial knowledge and foster family entrepreneurship, thereby fostering the robust and stable operation of both the global financial market and the job market.

Unlocking Business Success: The Role of Financial Literacy, Innovation Capability, and Government Support

Purpose: This study aims to analyse the effect of financial literacy and innovation capability on business performance with government support as a mediating variable. Theoretical framework: Government Support as a mediation was analyzed the effect of financial literacy and innovation capability on business performance. Method: A quantitative methods approach was used by distributing questionnaires to 110 Food & Beverage MSME in Jakarta Area. The data collection process was carried out using google form, then analysed using path analysis processed using Smart-PLS. Result: This study found that financial literacy has positive impact on government support but innovation capability has not, then innovation capability and government support have the positive effect on MSME performance, but financial literacy has no impact on MSME performance. The mediation test found that government support mediates the effect of innovation capability and financial literacy on MSME performance. Research, Practical & Social implications: This finding suggests that the government as a regulator should continue to increase its support for MSME actors so as to improve the performance of MSME businesses. This finding encourages MSME actors to have strong instincts in creating and implementing the latest innovations in their business to get government support in improving their business. Originality/value: This study uses 3 business performance indicators using primary data which are usually used in analysing the company's secondary data, with sufficient validity and reliability results, the use of these indicators is also suitable in analysing business performance in primary data.

Role of Financial Literacy and Saving Habits on Fintech Adoption post Covid-19

Research Originality: This research paper enriches existing literature on drivers of fintech adoption, including the impact of perceived trust, individual innovativeness, savings habits, and government support on Indonesian users' post-COVID-19 pandemic fintech adoption intentions.Research Objectives: This study examines the impact of post-covid changes in people's behaviour, savings habits and accelerated financial literacy on strengthening Technology Adoption Model (TAM) among Indonesian fintech users. Research Methods: The researchers surveyed 536 people living in Indonesia. The data was analysed using structural equation modelling with moderator variables. Empirical Results: It found that ease of use, usefulness, trust and personal innovativeness are key drivers of adoption intentions. The research also found that savings habits significantly increase the influence of government support on fintech adoption. Implications: This research has two important implications. First, digital finance companies should further improve fintech app service quality and security. Second, the government should also encourage the expansion of a fintech-based startup ecosystem by providing regulatory support to accelerate the progress of Indonesia's digital finance industry.JEL Classification: M21, G23, O36How to Cite:Nugraha, D. P., Setiawan, B., Emilda, E., Masyhuri, M., Quynh, M. N., Nathan, R. J., Fekete-Farkas, M., & Hagen, I. (2024). Role of Financial Literacy and Saving Habits on Fintech Adoption post Covid-19. Etikonomi, 23(1), 63 – 80. https://doi.org/10.15408/etk.v23i1.37856.

The Effect of Financial Planning on Consumer Debt Management: The Role of Financial Literacy, Self-Efficacy, and Financial Motivation

This qualitative study investigates the complex interplay between financial literacy, financial behavior, self-control, debt management, and financial well-being. Utilizing in-depth interviews with a purposively selected group of individuals engaged in financial planning to manage personal or household debt, the research aims to explore how financial literacy, self-efficacy, and financial motivation mediate the relationship between financial planning and consumer debt management. The methodology encompasses a thematic analysis of participants' narratives to identify and interpret the underlying themes related to financial management practices. Findings reveal a multifaceted relationship where financial literacy emerges as a foundational element, enhancing participants' ability to manage debt effectively. High financial self-efficacy, influenced by literacy, motivates proactive financial behaviors, leading to improved financial well-being. Conversely, low self-control and procrastination were identified as significant barriers to effective debt management. The study also highlights the pivotal role of quantitative literacy and material values in shaping financial behavior, with strong quantitative skills and lower materialism associated with forward-looking financial decisions. These insights underscore the need for comprehensive financial education that addresses not only the cognitive aspects of financial decision-making but also the psychological factors influencing financial behaviors. Tailoring financial education to individual needs and contexts is critical for enhancing financial literacy, self-efficacy, and motivation, ultimately leading to better debt management and financial health.