The role of national culture in financial literacy:<scp>Cross‐country</scp>evidence

Beckker, Kenneth De; Witte, Kristof De; Campenhout, Geert Van

doi:10.1111/joca.12306

Cited by 33 publications

(30 citation statements)

References 70 publications

(85 reference statements)

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“…The cultural context matters in financial behavior and financial literacy (De Beckker et al , 2020). Similar studies in different countries and contexts may also provide further insights.…”

Section: Discussionmentioning

confidence: 99%

Does financial literacy reduce financial fragility during COVID-19? The moderation effect of psychological, economic and social factors

Chhatwani

Mishra

2021

IJBM

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PurposeThe present study examines the linkage between financial literacy and financial fragility during COVID-19. It further examines if financial literacy has a differential impact on financial fragility based on psychological (financial confidence), economic (wealth) and social (race) factors.Design/methodology/approachThe authors used nationally representative data of the American working age-group. They collated six different datasets collected at different time-periods to conduct the present study. Based on 2,202 observations, they conducted logistic regression analyses to test the proposed relationships.FindingsThe authors find that financial literacy reduces the odds of being financially fragile by 9.1%. Furthermore, they find that financially literate consumers having high financial confidence are less financially fragile during COVID-19. Besides, the adverse impact of financial literacy on financial fragility is more for consumers having more than less wealth. The interaction with race is not significant, suggesting that financial literacy cuts across racial boundaries.Practical implicationsFinancial fragility is an important factor having numerous deleterious consequences. The authors’ study found that financial confidence, psychological factor and wealth economic factor enhances the negative effect of financial literacy on financial fragility. Banks and financial institutes can develop mechanisms to infuse confidence in individuals during the pandemic to reduce their financial fragility. Policymakers and governments may increase awareness related to debt management practices and design financial literacy interventions to reduce financial fragility among individuals.Originality/valueThe study is one of the initial studies to examine the antecedents of financial fragility. Based on a time-lagged data, the authors’ study examines the linkage between financial literacy and financial fragility. Though scholars have investigated financial literacy and its implications, scholarly work in this domain during COVID-19 is at best limited. The study contributes to the literature by testing the effects of boundary conditions that can change financial literacy's impact on financial fragility.

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“…The cultural context matters in financial behavior and financial literacy (De Beckker et al , 2020). Similar studies in different countries and contexts may also provide further insights.…”

Section: Discussionmentioning

confidence: 99%

Does financial literacy reduce financial fragility during COVID-19? The moderation effect of psychological, economic and social factors

Chhatwani

Mishra

2021

IJBM

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“…Financial decisions and financial behaviors vary across different cultures (De Beckker et al , 2020). We conducted this study in the American context when the cases were rising there.…”

Section: Discussionmentioning

confidence: 99%

Mortgage delinquency during COVID-19: do financial literacy and personality traits matter?

Chhatwani

2022

IJBM

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PurposeMortgage delinquency has become a major crisis following the COVID-19 pandemic. This study explored mortgage delinquency antecedents, focusing on two individual-level factors: financial literacy and personality traits.Design/methodology/approachUsing a large sample of 2,511 consumers, we examined the direct effect of financial literacy and its interaction with personality traits to predict mortgage delinquency based on logistic regression analysis. We further provide several robustness tests to validate our findings.FindingsWe find that financially literate consumers are 6% less likely to delay their mortgage repayment during the COVID-19 pandemic. Moreover, personality traits such as neuroticism and extroversion positively and conscientiousness negatively moderate the given linkage between financial literacy and mortgage delinquency.Practical implicationsBanks and financial companies may devise relevant policies to reduce mortgage repayment by knowing the interplay between financial literacy and personality traits. Personality traits can be considered one of the parameters while sanctioning mortgages to prospective customers.Originality/valueOur research examines the linkage between financial literacy, personality traits and mortgage delinquency based on a large nationally representative sample. Our findings suggest that personality traits moderate the effect of financial literacy on mortgage delinquency.

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“…7. Geography: In addition to personal characteristics, recent literature demonstrates how different cultural backgrounds and embedded social norms can impact on financial knowledge and skills, and thus the importance of analyzing data disaggregated by different geographical contexts (Brown et al 2018;De Beckker et al 2020). For Italy, Fornero and Monticone (2011), exploiting data from the Bank of Italy's Survey on Household Income and Wealth, found evidence of main differences within the same national territory: they identified a significant difference in FL among residents of different regions, with North-Central Italian residents having higher literacy levels than those of the South of Italy.…”

Section: Decision Treementioning

confidence: 99%

Machine Learning and Financial Literacy: An Exploration of Factors Influencing Financial Knowledge in Italy

Levantesi

Zacchia

2021

JRFM

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In recent years, machine learning techniques have assumed an increasingly central role in many areas of research, from computer science to medicine, including finance. In the current study, we applied it to financial literacy to test its accuracy, compared to a standard parametric model, in the estimation of the main determinants of financial knowledge. Using recent data on financial literacy and inclusion among Italian adults, we empirically tested how tree-based machine learning methods, such as decision trees, random, forest and gradient boosting techniques, can be a valuable complement to standard models (generalized linear models) for the identification of the groups in the population in most need of improving their financial knowledge.

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The role of national culture in financial literacy:Cross‐countryevidence

Cited by 33 publications

References 70 publications

Does financial literacy reduce financial fragility during COVID-19? The moderation effect of psychological, economic and social factors

Does financial literacy reduce financial fragility during COVID-19? The moderation effect of psychological, economic and social factors

Mortgage delinquency during COVID-19: do financial literacy and personality traits matter?

Machine Learning and Financial Literacy: An Exploration of Factors Influencing Financial Knowledge in Italy

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