The effect of financial knowledge on firm performance

Wati, Cicik Retno; Sumiati, Sumiati; Andarwati, Andarwati

doi:10.20525/ijrbs.v10i8.1450

Cited by 5 publications

(3 citation statements)

References 47 publications

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“…They refer to the ability to understand and use the company's financial statements to calculate fundamental financial ratios that allow the business to be adequately evaluated and managed. In this way, the entrepreneur's financial literacy is an important determinant of a company's performance, and various research around the world has demonstrated the relationship between these variables (Wati et al 2021;Augustin et al 2020;Agyapong and Attram 2019;Engström and McKelvie 2017).…”

Section: Financial Literacy and Company Performancementioning

confidence: 99%

Financial Literacy of Entrepreneurs and Companies’ Performance

Culebro-Martínez,

Moreno-García,

Hernández-Mejía

2024

JRFM

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Financial literacy is the ability of people to process economic information to make better financial decisions. Therefore, the financial literacy of entrepreneurs could affect the management of their companies and their results. The aim of this research is to determine if there is a significant relationship between companies’ performance and financial knowledge, financial behavior, and financial attitude of micro, small, and medium-sized entrepreneurs. The incidence of the variables age, size, and sector of the companies, as well as the entrepreneur’s age, gender, and educational level on companies’ performance, is also analyzed. Data from 206 entrepreneurs from Veracruz, Mexico, were analyzed using a logistic regression model. The results show that the financial behavior of the entrepreneurs has a positive and highly significant effect on companies’ performance, although the entrepreneur´s knowledge and attitude don´t have a significant relationship with companies´ performance. The results also show that companies in the industrial sector led by men are less likely to obtain high performance compared to those in the commerce sector. No incidence was found of the variables age, size of the company, and entrepreneur´s educational level on the performance of their companies.

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Section: Financial Literacy and Company Performancementioning

confidence: 99%

Financial Literacy of Entrepreneurs and Companies’ Performance

Culebro-Martínez,

Moreno-García,

Hernández-Mejía

2024

JRFM

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“…Ye & Kulathunga, (2019) Financial risk attitude is the extent to which companies are willing to pursue risky financial resource opportunities in ventures with unknown outcomes. Wati et al, (2021) explain that financial risk attitude can be said to be the tendency of individual attitudes in making risky or risk-averse decisions in possible outcomes and situation uncertainty. Risk-averse companies will receive low returns in exchange for less risk exposure, while entrepreneurs who are willing to take higher risks will compensate with high expected returns.…”

Section: Financial Risk Attitudesmentioning

confidence: 99%

The effect of financial literacy on business performance through mediation of financial access and financial risk attitude

Priyantoro,

Ratnawati,

Aisjah

2023

IJRBS

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MSMEs play a vital role in global economic development, as well as being the key to most businesses and important contributors to job creation and economic development. However, amidst the uncertain business and economic situation, most MSMEs have to struggle to maintain their business performance. So efforts are needed from various parties to improve business performance in MSMEs. This research aims to test and analyze the influence of financial literacy levels on business performance, with financial access and financial risk attitudes as mediating variables. Sampling in this research used a purposive sampling technique among tofu processing industry players in Kediri City. The sample was determined using the Slovin method and a sample of 400 respondents was obtained. The method used in this research uses Structural Equation Model (SEM) Partial Least Square (PLS) analysis through the SmartPLS data processing program version 3. The results of this research show that all hypotheses are accepted. Financial literacy, access to finance and financial risk attitudes have a positive and significant effect on business performance. Financial access is able to mediate the relationship between financial literacy and financial risk attitudes, and financial risk attitudes are also able to mediate the relationship between financial literacy and business performance in the Kediri City tofu processing industry.

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“…Financial inclusion is a key factor in supporting economic growth, especially by optimizing the contribution of the financial sector and expanding access to financial services for the public. Commercial entities such as MSMEs, requires capital assistance so that they can grow their businesses and contribute to their performance (Chuc et al, 2022;Malagueño, Lopez-Valeiras, & Gomez-Conde, 2018;Mujanah, Ratnawati, & Kusmaningtyas, 2019;Nuryakin, Widowati, & Fatmawati, 2018;Tram, Lai, & Nguyen, 2023;Wati, Sumiati, & Andarwati, 2021). The existence of a research deficit creates gaps or opportunities for researchers to conduct research or further investigate the relationship between financial literacy, fintech, and financial inclusion, which has an impact on the performance of small and medium enterprises.…”

Section: Introductionmentioning

confidence: 99%

The impact of financial literacy, financial technology, and financial inclusion on SME business performance in Malang Raya, Indonesia

Rahadjeng,

Pratikto,

Mukhlis

et al. 2023

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The purpose of this study is to determine the relationship between financial literacy, financial technology, and financial inclusion and the business performance of SMEs in Malang Raya, Indonesia. Looking at various cases related to financial progress, all of which are turning to technology to ensure time efficiency, there is a need for further development related to research on financial technology, and financial inclusion for SMEs' business performance in Malang Raya. The analysis in this study used bibliometrics and PLS. Bibliometrics is used to find relationships that will later become new things. Before the bibliometric analysis, this research looked for references to research through Publish or Perish, so more than 200 reputable journals based on electronics were found in accordance with this study. Furthermore, filters related to the scope are more specifically related to financial technology and the inclusion of SMEs' performance. So fintech is being discovered as a novelty between financial literacy and financial inclusion. The second analysis examines the influence of financial literacy, financial technology, and, financial inclusion on the business performance of SMEs. The results of this study using PLS show that financial literacy has a positive and significant effect on the business performance of SMEs. Financial technology does not affect SMEs' business performance, and lastly, financial inclusion has a positive and significant effect on SMEs' business performance. The limitation of this study is related to the object of research that still focuses on Malang Raya.

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The effect of financial knowledge on firm performance

Cited by 5 publications

References 47 publications

Financial Literacy of Entrepreneurs and Companies’ Performance

Financial Literacy of Entrepreneurs and Companies’ Performance

The effect of financial literacy on business performance through mediation of financial access and financial risk attitude

The impact of financial literacy, financial technology, and financial inclusion on SME business performance in Malang Raya, Indonesia

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