Antecedents to responsible financial management behavior among young adults: moderating role of financial risk tolerance

Abstract

Purpose

The study examines the antecedents of responsible financial management behavior among young adults in India and explores the role of financial risk tolerance as a moderating variable.

Design/methodology/approach

The sample includes young adults in the age group of 18–35. The analysis uses a two-step approach via standard partial least squares structural modeling (PLS-SEM) and ordinary least square (OLS) regression.

Findings

Structural modeling results show that financial attitude fully mediates the relationship between financial knowledge and responsible financial management behavior, and locus of control influences responsible financial management behavior. Financial risk tolerance moderates the relationship. Among demographic factors, age and occupation influence responsible financial management behavior.

Research limitations/implications

The financial knowledge used in the survey are based on self-reported responses. The future study can include participants from both developed and emerging countries to assess similarities and differences.

Practical implications

Despite the growing focus on improving financial literacy, there are growing concerns regarding responsible financial behavior. Since financial services is related to fiduciary responsibility, managers and policymakers need to ensure that financial knowledge results in improving financial attitude, which further leads to responsible financial behavior.

Originality/value

The present study from an emerging country will add value to the literature.

Citation

Bapat, D. (2020), "Antecedents to responsible financial management behavior among young adults: moderating role of financial risk tolerance", International Journal of Bank Marketing, Vol. 38 No. 5, pp. 1177-1194. https://doi.org/10.1108/IJBM-10-2019-0356