scholarly journals The impact of financial literacy and financial interest on risk tolerance

2021 ◽  
Vol 29 ◽  
pp. 100450
Author(s):  
Cecilia Hermansson ◽  
Sara Jonsson
Keyword(s):  
Financial Literacy ◽  
Risk Tolerance ◽  
Financial Interest ◽  
The Impact

scholarly journals Investment Literacy, Risk Tolerance and Mutual Fund Investments: An Exploratory Study of Working Adults in Kuala Lumpur

2021 ◽  
Vol 21 (1) ◽  
pp. 111-133
Author(s):  
Nurul Shahnaz Mahdzan ◽  
Rozaimah Zainudin ◽  
Siew-Chan Yoong
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Financial Literacy ◽  
Financial Education ◽  
Risk Tolerance ◽  
Kuala Lumpur ◽  
Working Adults ◽  
Higher Institution ◽  
High Investment ◽  
The Impact

Financial literacy empowers consumers to make more informedfinancial decisions,including investing in mutual funds. In thisstudy,thesociodemographic profile of working adultswith low investment literacyvis-à-vis high investment literacyare examined first. Next, the impact of investment literacyand risk toleranceon the likelihood of investing in mutual fundsare explored. Among a sample of 260 working adults comprising mainly of Masters of Business Administration(MBA) studentsfrom a leading public higher institution in Kuala Lumpur, Malaysia, the study showsthat those withBusiness/Economics education backgroundshave the highest investment literacyand are more likely to invest in mutual funds compared to individuals from the Arts and other miscellaneous backgrounds. Although Muslims are the least literatein investment matters, they are more likely to hold mutual fundinvestments relative to those who profess Christianity and Hinduism. Individuals with relatively high income and occupational levels have relatively higher investment literacy. Risk tolerance does not influence the likelihood of investing in mutual fund investments.Policymakers should focus on females, those with Arts education background, Muslims, and those from the lower income/employment ranks to increase their investment literacythrough financial education workshops. Mutual fund companies may consider embarking an aggressive knowledge sharing videos related to mutual funds via non-mainstream mediasuch as social mediato increase the penetration of mutual fund investments, among the untapped markets.

scholarly journals Financial Literacy and Financial Risk Tolerance of Individual Investors: Multinomial Logistic Regression Approach

SAGE Open ◽  
2020 ◽  
Vol 10 (3) ◽  
pp. 215824402094571
Author(s):  
Yılmaz Bayar ◽  
H. Funda Sezgin ◽  
Ömer Faruk Öztürk ◽  
Mahmut Ünsal Şaşmaz
Keyword(s):  
Logistic Regression ◽  
Financial Literacy ◽  
Financial Risk ◽  
Multinomial Logistic Regression ◽  
Demographic Characteristics ◽  
Risk Tolerance ◽  
Financial Investment ◽  
Multinomial Logistic Regression Analysis ◽  
The Impact ◽  
Financial Risk Tolerance

Financial risk tolerance is one of the important factors affecting the financial investment decisions of individuals and institutional investors and a crucial factor of financial planning and financial counseling. It is therefore necessary to determine the major determinants of risk tolerance. In this article, we researched the impact of financial literacy level and demographic characteristics on the financial risk tolerance of the individuals in the sample of Usak University staff, using a multinomial logistic regression analysis and retrieving data through the questionnaire method. Multinomial logistic regression is an extension of binary logistic regression, allowing for three or more categories of the dependent variable. The findings of the empirical analysis reveal that financial literacy and demographic characteristics of age, gender, education, and income levels are significant determinants of financial risk tolerance. In this regard, the improvements in the financial literacy of the individuals through various education programs will probably raise the demand of financial products with different risk characteristics and in turn contribute to the development of financial sector.

The impact of entrepreneurs’s financial literacy on innovation within small and medium-sized enterprises

2020 ◽  
pp. 026624262095907
Author(s):  
Baohua Liu ◽  
Jiancheng Wang ◽  
Kam C Chan ◽  
Anna Fung
Keyword(s):  
Financial Literacy ◽  
Risk Tolerance ◽  
Transmission Mechanism ◽  
Policy Implications ◽  
Capital Theory ◽  
Financial Decisions ◽  
Risky Investment ◽  
Large Survey ◽  
The Impact ◽  
Innovation Metrics

This article analyses the impact of an entrepreneur’s financial literacy upon innovation within small- and medium-sized enterprises (SMEs) and, in so doing, extends human capital theory to consider the effect of financial literacy on risky investment decisions. Using a large survey dataset of Chinese SMEs in 2015 and 2017, our findings suggest that financial literacy is positively associated with innovation; positive relationships are robust to different innovation metrics. In addition, we find that gender matters, as male owners appear to promote more innovations, while firm size is positively associated with innovation. Additional analysis suggests that risk tolerance is a transmission mechanism for the impact of financial literacy on innovation. Our results corroborate previous studies showing that individuals with greater financial literacy make sound personal financial decisions and so have important public policy implications.

scholarly journals The Impact of Behavioral Finance Factors and the Mediating Effect of Investment Behavior on Individual’s Financial Well-being: Empirical Evidence from Pakistan

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Muhammad Arsalan Ali ◽  
Khalil ur Rehman ◽  
Adnan Maqbool ◽  
Shahid Hussain
Keyword(s):  
Risk Perception ◽  
Financial Literacy ◽  
Financial Education ◽  
Well Being ◽  
Risk Tolerance ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Future Research ◽  
Investment Behavior ◽  
The Impact

Individual financial well-being is recognized as a major concern for the general welfare and social welfare of society. In this context, it is very important to understand how people can ensure good financial well-being. This article aims to explore the effects of financial literacy, risk tolerance, and risk perception on the financial well-being of individuals, with an emphasis on behavioral investment interventions. Quantitative research methods are used to measure the factors that affect financial well-being. A questionnaire was developed on Google Forms to collect data from people who have bank accounts. The sample of 318 Pakistanis supports the proposed hypothesis. Structural equation modeling (SEM) was used to evaluate the results. The results show that risk tolerance, risk perception and financial literacy influence people's investment behavior and ultimately their financial well-being. Individual financial behavior needs to be improved. In this context, there is an urgent need for financial education programs in the education system and centers of employment, behavioral development and financial literacy. Future research on this topic could benefit from collecting longitudinal data which could provide more relevant information for Pakistanis seeking to achieve better financial well-being. All measures used are reported separately and individually, measuring the risk that respondents will misinterpret questions and even interpret their behavior.

The Impact of Financial Literacy on Financial Preparedness for Retirement in the Small and Medium Enterprises Sector in Uganda

2020 ◽  
Vol 9 (3) ◽  
pp. 26-41
Author(s):  
Colin Agabalinda ◽  
Alain Vilard Ndi Isoh
Keyword(s):  
Financial Literacy ◽  
Small And Medium Enterprises ◽  
Group Analysis ◽  
Moderating Effect ◽  
Primary Data ◽  
Retirement Preparedness ◽  
Medium Enterprises ◽  
The Impact ◽  
The Relationship ◽  
Effect Of Age

The study investigated the direct effects of financial literacy (knowledge, skills, and attitudes) on financial preparedness for retirement and the moderating effect of age among the small and medium enterprises in Uganda. Primary data was collected from a sample of n = 380 selected from the SME workforce. Descriptive analysis was run on SPSS, while validity and reliability of the measurement items yielded satisfactory composite reliability scores and average variance explained (AVE) scores for all items. Structural equation modelling (SEM) was used to test the hypotheses and multi-group analysis conducted to test for the moderating effect of age on the relationship between financial literacy and retirement preparedness. The results revealed that knowledge and skills were significant predictors of retirement preparedness. However, ‘attitude' was not a significant predictor, and age had no moderating effect on the relationship between the study variables. These findings present practical implications for policymakers and financial educators in a developing country context.

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