International Journal of Nonlinear Analysis and Applications

Modeling the factors affecting financial literacy using structural equations

Document Type : Research Paper

Authors

Department of Accounting, Bushehr Branch, Islamic Azad University, Bushehr, Iran

Abstract

The purpose of this research is to provide a model for measuring financial literacy in the capital market of Iran. The statistical population of this research, including the qualitative part, the intended statistical population is made up of experts, and 17 people were interviewed in a targeted manner. Also, in the quantitative part of the statistical community, there are managers, analysts and financial traders of the stock exchange in Tehran province, which was determined by the simple random method and the Cochran formula, with a sample size of 280 people. A researcher-made questionnaire was used to collect data. Validity was confirmed by using the content method and reliability with Cronbach's alpha. In the qualitative part, the dimensions of the model were identified by using the foundation data approach. In the quantitative part, confirmatory factor analysis and structural equations were used to quantify the model and rank the standards. Lisrel software was used to analyze the data. The results showed that the dimensions of the model include demographic components, economic skills, social components, educational components, investment management, basic financial knowledge, advanced financial knowledge, psychological components, technological, and cultural components, government laws, economic components, financial behavior, financial attitude, organizational learning, financial skill, financial management and financial results. The results of the research hypothesis test show the confirmation of the mentioned model.

Keywords

[1] A. Asbi, V. Ramiah, X. Yu, D. Wallace, N. Moosa and K. Reddy, The determinants of recovery from the Black Saturday bushfire: Demographic factors, behavioural characteristics and financial literacy, Account. Finance 60 (2020), no. 1, 15–46.
[2] N.R. Bank, Financial literacy framework, Government of Nepal, 2020.
[3] A. Coskun, M.A. Sahin and A. Zengin, Financial literacy in Turkey, Int. J. Res. Bus. Soc. Sci. 8 (2019), no. 3, 01–16.
[4] R. Desiyanti and A.A.M. Kassim, Financial literacy on business performance: The moderating effect of religiosity among SMEs in Sumatera, Indonesia, Int. J. Acad. Res. Account. Finance Manag. Sci. 10 (2020), no. 2, 87–99.
[5] K. Dorrani, G. Islami Bidgoli T. Gohari Nader, Evaluating the effectiveness of general education courses of Tehran stock exchange in promoting financial knowledge and culture of Sari participants, Quarterly Journal of Job and Organizational Consultant 5 (2013), no. 14, 119–133.
[6] C. Engels, K. Kumar and D. Philip, Financial literacy and fraud detection, Eur. J. Finance 26 (2020), no. 4–5, 420–442.
[7] G. Guarenti, Financial literacy effects on economic behavior: Empirical evidence from Italy, Universita’ Degli Studi Di Padova, 2019.
[8] J. Hastings and O.S. Mitchell, How financial literacy and impatience shape retirement wealth and investment behaviors, J. Pension Econ. Finance 19 (2020), no. 1, 1–20.
[9] M.H. Hosseinzadeh Bahraini and S.S. Malek Al-Sadati, Institutional barriers to investment and business in Iran, Res. J. Bus. 15 (2011), no. 59.
[10] N.K. Koh, Approaches to teaching financial literacy: Evidence-based practices in Singapore schools, International Handbook of Financial Literacy, Springer, Singapore, 2016.
[11] C. Lin, Y.J. Hsiao and C.Y. Yeh, Financial literacy, financial advisors, and information sources on demand for life insurance, Pacific-Basin Finance J. 43 (2017), 218–237.
[12] J. Lotto, Understanding sociodemographic factors influencing households’ financial literacy in Tanzania, Cogent Econ. Finance 8 (2020), no. 1, 1792152.
[13] P.J. Morgan and T.Q. Long, Financial literacy, financial inclusion, and savings behavior in Laos, J. Asian Econ. 68 (2020), 101197.
[14] J. Okicic, Can financial literacy drive active investment strategy? Evidence from underdeveloped capital market, Ecoforum J. 9 (2020), no. 2.
[15] J. Owusu, M.B. Ismail, M.H.B.M. Osman and G. Kuan, Financial literacy as a moderator linking financial resource availability and SME growth in Ghana, Innovations 16 (2019), no. 1, 154–166.
[16] A.A.A. Rashid, M.S. Jantan, M.A.F.A. Fairuz and N.A.A. Halim, Financial knowledge and personal financial literacy in investment priorities among university students, Available at SSRN 3541998, (2020).
[17] D.L. Remund, Financial literacy explicated: The case for a clearer definition in an increasingly complex economy, J. Consumer Affairs 44 (2010), no. 2, 276–295.
[18] S.P. Sharif and N. Naghavi, Family financial socialization, financial information seeking behavior and financial literacy among youth, Asia-Pacific J. Bus. Administ. u12 (2020), no. 2.
[19] S.P. Sharif, N. Naghavi, H.S. Nia and H. Waheed, Financial literacy and quality of life of consumers faced with cancer: A moderated mediation approach, Int. J. Bank Market. 38 (2020), no. 5.
[20] S. Zulaihati, S. Susanti and U. Widyastuti, Teachers’ financial literacy: Does it impact on financial behaviour?, Manag. Sci. Lett. 10 (2020), no. 3, 653–658.
International Journal of Nonlinear Analysis and Applications
Volume 14, Issue 9
September 2023
Pages 305-316
  • Receive Date: 07 October 2022
  • Revise Date: 14 December 2022
  • Accept Date: 20 December 2022