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Article
Publication date: 1 June 2021

Ümmühan Mutlu and Gökhan Özer

This study examines the effects of variables such as financial literacy and locus of control on the financial behavior of individual investors. Additionally, this article…

Abstract

Purpose

This study examines the effects of variables such as financial literacy and locus of control on the financial behavior of individual investors. Additionally, this article aims to reveal the moderator effect of financial literacy on locus of control and financial behavior.

Design/methodology/approach

Responses were collected from a questionnaire given to a convenience sample of 1,347 individual investors. Exploratory factor analysis (EFA), which reveals the factor structure of the scale, was used at the beginning of the study, and then confirmatory factor analysis (CFA) was performed to confirm this new factor structure. Hypothetical relationships were examined using structural equation modeling.

Findings

The study provides statistical support for the validity and reliability of the scales. The statistical results of the analysis reveal that financial literacy and locus of control have a positive effect on financial behavior. Moreover, the authors prove that financial literacy changes the relationship between internal locus of control and financial behavior. In conclusion, financial literacy plays a significant role as a moderator variable that interacts with locus of control.

Originality/value

The findings of the research are important in demonstrating empirical evidence for the theoretical correlations. In support of the current literature, this study has confirmed the positive effects of internal locus of control and financial literacy on the financial behavior of individual investors. In addition, it has been determined that the relationship between an individual's financial behavior and internal locus of control varies according to their level of financial literacy.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 1 June 2021

Kirti Goyal, Satish Kumar and Jing Jian Xiao

The purpose of this paper is to investigate the current state of research on Personal Financial Management Behavior (PFMB), with a prime focus on its antecedents and the…

Abstract

Purpose

The purpose of this paper is to investigate the current state of research on Personal Financial Management Behavior (PFMB), with a prime focus on its antecedents and the consequences. By analyzing the research trends, methods, determinants and outcomes, the PFMB literature is synthesized, and agenda for future research is suggested. A framework is presented that portrays PFMB's antecedents and consequences and further specification of the mediation and moderation linkages.

Design/methodology/approach

The review is based on 160 articles published during 1970–2020. It follows a systematic approach and presents the definitions and theories of PFMB, publication trends based on time, region, sample population, research designs, data collection and analysis techniques, along with antecedents and outcomes through content analysis.

Findings

The synthesis draws upon various factors affecting PFMB, such as demographics, socio-economic, psychological, social, cultural, financial experience, financial literacy (FL) and technological factors. The prominent outcomes of PFMB include financial satisfaction, relationship satisfaction, quality of life, financial success, happiness, financial vulnerability/resilience and financial well-being. The future research agenda sums up the recommendations in the form of research questions on variables and their linkages, followed by methodological advancements.

Originality/value

This paper covers the scholarly work done in this area in the past 51 years. To the best of authors' knowledge, this is the first attempt to offer a most comprehensive and collective scholarship of this subject. It further gives an extensive future research agenda.

Details

International Journal of Bank Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 20 May 2021

Heejung Park

In the uncertainty of the global economy, many young adults have financial independence from their parents and are making financial decisions in a difficult financial

Abstract

Purpose

In the uncertainty of the global economy, many young adults have financial independence from their parents and are making financial decisions in a difficult financial environment. This study aims to focus on debt management behavior for young adult consumers.

Design/methodology/approach

The data is from the 2010 National Longitudinal Survey of Youth 1997 (NLSY97). The NLSY97 includes information on US young consumers’ financial, demographic and attitudinal characteristics, as well as various socio-economic conditions, making it convenient to explore the relationships between financial behavior and psychology variables. In the 2010 survey, 4,110 young consumers were interviewed.

Findings

The results show that self-determination and motivation alone cannot bring about a direct change in financial behavior without the mediation of financial psychology. Therefore, consumer finance research should consider debt-management behavior by presenting different strategies than those currently used.

Originality/value

In the self-determination theory, emphasizes the internal grounds for distinguishing self-regulation from personality development and behavior. Specially, this paper deals with the financial behavior of young adult consumers through self-determination theory.

Details

Young Consumers, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1747-3616

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Article
Publication date: 15 December 2020

Kavita Karan Ingale and Ratna Achuta Paluri

Numerous exploratory, conceptual and empirical enquiries on financial behaviour and literacy have been conducted in the areas of economics, finance, business and…

Abstract

Purpose

Numerous exploratory, conceptual and empirical enquiries on financial behaviour and literacy have been conducted in the areas of economics, finance, business and management. However, no attempt was made to present a comprehensive science mapping of the area so far. Hence, the study intends to elicit the trend in the research field through synthesis of knowledge structures.

Design/methodology/approach

Bibliometric analysis in the field of financial literacy and financial behaviour was performed on a sample of 1,138 documents based on a scientific search strategy run on the Web of Science database for the period 1985–2020. Biblioshiny, which is a web-based application included in Bibliometrix package developed in R-language (Ariaa and Cuccurullo, 2017), was used for the study. With the help of automated workflow in the software, prominent journals, authors, countries, articles, themes were identified; and citation, co-citation and social network analysis were conducted.

Findings

Results show that the themes of financial literacy and financial behaviour have evolved over a period of time as an interdisciplinary field. In the initial stages, researchers focused on demographic and socio-economic determinants, but gradually the field embraced topics like behavioural and psychological constructs influencing financial behaviour. Along with conceptual structure, this research reveals the intellectual and social structure of the domain. This study provides important insights on areas that need further investigation.

Research limitations/implications

The current research is a bibliometric analysis and hence limitations related to such studies are applicable. For future researchers to derive a strong conceptual framework, a systematic review of literature would be helpful. Science mapping for this study is limited to the Web of Science database owing to its wider coverage of good quality journals, structured formats which are compatible with the Bibliometrix software.

Practical implications

The current study provides important insights on financial literacy and financial behaviour and their inter-linkages. It highlights the most addressed issues in the area and leads towards the prospective areas for research. It informs the future researchers about the emergent themes, contexts and possibilities of collaborations in this area by revealing social and intellectual structure of the domain.

Social implications

The paper can provide important insights for policy formulation in the areas of financial education and literacy.

Originality/value

There has been lot of conceptual and empirical work done in the past, across countries, spanning the disciplines such as economics, finance, psychology and consumer behaviour. A major contribution of this study is that it consolidates fragmented literature in the area, highlights significant sources, authors and documents, while exploring the relation between financial literacy and financial behaviour.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 7 October 2020

Maureen Oquaye, Godfred Matthew Yaw Owusu and Godfred Alufar Bokpin

This paper examines the effect of financial self-efficacy and financial behaviour on financial well-being and ascertains whether financial well-being affects an…

Abstract

Purpose

This paper examines the effect of financial self-efficacy and financial behaviour on financial well-being and ascertains whether financial well-being affects an individual's level of happiness in life. The authors also show the mediating role of financial behaviour in the relationship between self-efficacy and financial well-being.

Design/methodology/approach

The survey method of research was adopted using questionnaires as the principal means of data collection. The hypotheses of the study were tested on a rich data set from a sample of 210 parliamentarians in Ghana using the structural equation modelling technique.

Findings

The results show that individuals with high level of financial self-efficacy practise responsible financial behaviour and find financial behaviour to be a good predictor of financial well-being. The authors also find financial behaviour to mediate between financial self-efficacy and financial well-being and conclude that well-being impacts positively on happiness.

Practical implications

Findings of this study demonstrate that the financial well-being of an individual has important implications on the quality of life and an important way of improving well-being is to promote responsible financial behaviour.

Originality/value

This study employs the subjective measure of financial well-being in its analysis and also examines an outcome of financial well-being.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 29 June 2020

Farah Diba M.A. Abrantes-Braga and Tânia Veludo-de-Oliveira

This study aims to develop and test a parsimonious theoretical model of risky indebtedness behaviour, a facet of over-indebtedness that refers to the behavioural tendency…

Abstract

Purpose

This study aims to develop and test a parsimonious theoretical model of risky indebtedness behaviour, a facet of over-indebtedness that refers to the behavioural tendency of often assuming hazardous debt levels.

Design/methodology/approach

The authors administered an online survey to credit card owners (n = 1,288) in an emerging economy in which consumer credit is characterized by extremely high interest rates (i.e. Brazil). The authors used covariance-based structural equation modelling to analyse the data and test for mediation effects.

Findings

Individuals who inadvertently consider their credit limits a part of their current income or are typically anxious about money are prone to engage in impulsive buying and, consequently, risky indebtedness behaviour. By engaging in such indebtedness behaviour, individuals weaken their financial preparedness for emergencies, which potentially jeopardizes their overall financial well-being.

Research limitations/implications

As indebtedness is a highly sensitive issue, the self-report measures used may have produced social desirability bias.

Practical implications

This study discusses the responsibility of financial institutions to support consumers in building awareness on how to adequately use financial services and to provide credit access to high-risk consumers. Policymakers need to ensure that those in the private sector play fairly.

Originality/value

This study adds new knowledge about how destructive financial behaviours operate and impact marketing and consumers’ financial well-being. It theorizes about indebtedness by critically examining existing and newly developed concepts in the financial services marketing literature.

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Article
Publication date: 8 November 2019

Dhananjay Madhukar Bapat

The profiling of young adult financial behavior can help financial service providers and financial advisors to target suitable marketing resources to specific customer…

Abstract

Purpose

The profiling of young adult financial behavior can help financial service providers and financial advisors to target suitable marketing resources to specific customer segments. The purpose of this paper is to validate the scale for financial management behavior of young adults in an emerging market, segment these individuals and investigate the impact of demographic variables on key dimensions.

Design/methodology/approach

A structured questionnaire is used to validate a financial management behavior scale using data collected from 270 young adults in India. Based on dimensions obtained through factor analysis, cluster analysis is performed to identify young adult segments. Statistical techniques, such as the t-test and one-way analysis of variance, are used to examine the impact of demographic variables on financial management behavioral dimensions.

Findings

The factor analysis confirms three key financial management dimensions: cash management, credit management and savings management. Using cluster analysis, the young adults are segmented into three subgroups: responsible customers, credit-oriented customers and vulnerable customers. Young adults in these groups follow hierarchical patterns in terms of financial management behavior.

Originality/value

Since few studies are available from the standpoint of young adults in emerging markets, this study adds value to the literature by investigating the financial management behavior of young adults in India. Notably, it can serve as a reference for comparing similarities and differences on the basis of financial management behavior with other countries and customer segments.

Details

International Journal of Bank Marketing, vol. 38 no. 2
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 6 June 2020

Dhananjay Bapat

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…

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.

Details

International Journal of Bank Marketing, vol. 38 no. 5
Type: Research Article
ISSN: 0265-2323

Keywords

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Article
Publication date: 16 July 2019

Vilani Sachitra, Dinushi Wijesinghe and Wajira Gunasena

Undergraduates are expected to be future leaders responsible for business and nations. Given that sound financial decision-making is critical to their success in their…

Abstract

Purpose

Undergraduates are expected to be future leaders responsible for business and nations. Given that sound financial decision-making is critical to their success in their careers and lives, it is important to understand the money-management behaviour of undergraduates. In the context of developing countries, the body of knowledge on money-management behaviour is dominated by functional financial literature and there is little research on factors beyond this. This study aims to fill this gap by exploring economic, social and psychological factors that influence money-management behaviour of undergraduates in a developing nation (Sri Lanka) and how undergraduates respond to these influences.

Design/methodology/approach

The study used a qualitative exploratory approach. Data collection was carried out using focus group discussions and individual interviews amongst undergraduates in a leading Sri Lankan state university.

Findings

The results indicate that undergraduates adopted both careful and risky money-management approaches. The subthemes, specifically identified under economic, social and psychological factors, revealed how undergraduates responded to each of these factors and the influence of contextual and cultural differences in their money-management behaviour.

Research limitations/implications

Findings of the study revealed the importance of promoting innovative educational strategies to change the dependability mindset of undergraduates and to promote stress-management strategies that will assist them to enhance their personalities and creativity in making financial decisions. Theoretical and practical implications and future research directions are provided.

Originality/value

The literature scores in developing context are limited to exploring the existing pattern and the levels of the functional financial literacy. This study has deepened the authors’ understanding of how the developing context affects undergraduates’ response to the factors relating to their money-management behaviour. The findings from this study will be useful to government, financial institutions, educational institutions, parents and those who have a keen interest in encouraging healthy money-management behaviour in undergraduates.

Details

Young Consumers, vol. 20 no. 3
Type: Research Article
ISSN: 1747-3616

Keywords

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Article
Publication date: 21 March 2016

Ani Caroline Grigion Potrich, Kelmara Mendes Vieira and Wesley Mendes-Da-Silva

The purpose of this paper is to build and compare models that assess university students’ financial literacy. Financial literacy, understood as the mastery of a set of…

Abstract

Purpose

The purpose of this paper is to build and compare models that assess university students’ financial literacy. Financial literacy, understood as the mastery of a set of knowledge, attitudes and behaviors, has assumed a fundamental role in allowing and enabling people to make responsible decisions as they strive to attain financial wellbeing. To this end, models that integrate financial knowledge, behavior and attitude are integrated. The models are subsequently estimated, and many comparative tests are performed.

Design/methodology/approach

The study investigated a random sample of 534 university students attending public and private universities in southern Brazil. The choice of scale was based on consideration of the best adjustment for the Brazilian context, appropriate translation and content validation. For an analysis of the collected data, structural equation modeling was employed using two strategies.

Findings

The findings indicate that, in the model estimation stage, the scales for behavior and attitude have been reduced. Among all of the models estimated, the best adjusted model indicates that financial knowledge and financial attitude have positive impacts on financial behavior.

Research limitations/implications

The results are not generalizable to the wider population; to enable such generalization, different profiles should be researched using a larger sample. In practical terms, the financial behavior of Brazilian university students expresses the ability to establish long-term aims and saving aimed at future acquisitions and unexpected spending. This behavior is directly influenced by basic and advanced questions of financial knowledge and also by the importance attributed to attitude by establishing aims, control of spending and financial reserves.

Originality/value

This paper describes a pioneer study with respect to modeling financial literacy in Brazil. This topic can be improved as the need for rigorous evaluation of financial literacy grows at the same speed as the creation of more complex financial products.

Details

Management Research Review, vol. 39 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

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