IDEAS home Printed from https://ideas.repec.org/p/bdi/opques/qef_724_22.html
   My bibliography  Save this paper

Micro-entrepreneurs’ financial and digital competences during the pandemic in Italy

Author

Listed:
  • Alessio D'Ignazio

    (Bank of Italy)

  • Paolo Finaldi Russo

    (Bank of Italy)

  • Massimiliano Stacchini

    (Bank of Italy)

Abstract

We analyse new survey data from a representative sample of about 2,000 Italian micro-entrepreneurs to assess their level of financial and digital competences and to investigate whether these skills help them cope with unexpected shocks. We find that the financial literacy and digital skills of Italian micro-entrepreneurs are quite limited, especially for one-person businesses and owners with a lower level of education. By controlling for several business characteristics, we also find that financial literacy is significantly correlated with the transition to more digitalized business models and with greater resilience to external shocks: financially savvy entrepreneurs were better able to build liquidity buffers prior to the COVID-19 crisis and access government aid during the pandemic. As for the role of digital skills in supporting businesses during the crisis, empirical evidence is less clear-cut.

Suggested Citation

  • Alessio D'Ignazio & Paolo Finaldi Russo & Massimiliano Stacchini, 2022. "Micro-entrepreneurs’ financial and digital competences during the pandemic in Italy," Questioni di Economia e Finanza (Occasional Papers) 724, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_724_22
    as

    Download full text from publisher

    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2022-0724/QEF_724_22.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Graeber & Alexander S. Kritikos & Johannes Seebauer, 2021. "COVID-19: a crisis of the female self-employed," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(4), pages 1141-1187, October.
    2. Miriam Bruhn & Bilal Zia, 2011. "The Impact of Business and Financial Literacy Training for Young Entrepreneurs in Bosnia-Herzogovina," World Bank Publications - Reports 10096, The World Bank Group.
    3. Balduzzi, Pierluigi & Brancati, Emanuele & Brianti, Marco & Schiantarelli, Fabio, 2020. "The Economic Effects of COVID-19 and Credit Constraints: Evidence from Italian Firms' Expectations and Plans," IZA Discussion Papers 13629, Institute of Labor Economics (IZA).
    4. Alejandro Drexler & Greg Fischer & Antoinette Schoar, 2014. "Keeping It Simple: Financial Literacy and Rules of Thumb," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 1-31, April.
    5. Han Ei Chew & Vigneswara P. Ilavarasan & Mark R. Levy, 2015. "Mattering Matters: Agency, Empowerment, and Mobile Phone Use by Female Microentrepreneurs," Information Technology for Development, Taylor & Francis Journals, vol. 21(4), pages 523-542, October.
    6. Abi Jagun & Richard Heeks & Jason Whalley, 2008. "The Impact of Mobile Telephony on Developing Country Micro-Enterprise: A Nigerian Case Study," Information Technologies and International Development, MIT Press, vol. 4(4), pages 47-65, October/J.
    7. Noemi Oggero & Maria Cristina Rossi & Elisa Ughetto, 2020. "Entrepreneurial spirits in women and men. The role of financial literacy and digital skills," Small Business Economics, Springer, vol. 55(2), pages 313-327, August.
    8. Hai Guo & Zhuen Yang & Ran Huang & Anqi Guo, 2020. "The digitalization and public crisis responses of small and medium enterprises: Implications from a COVID-19 survey," Frontiers of Business Research in China, Springer, vol. 14(1), pages 1-25, December.
    9. Pierluigi Balduzzi & Emanuele Brancati & Marco Brianti & Fabio Schiantarelli, 2020. "Credit Constraints anf Firms' Decisions: Evidence from the COVID-19 Outbreak Italian Firms’ Expectations and Plans," Boston College Working Papers in Economics 1013, Boston College Department of Economics, revised 07 Oct 2022.
    10. Maksim Belitski & Christina Guenther & Alexander S. Kritikos & Roy Thurik, 2022. "Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses," Small Business Economics, Springer, vol. 58(2), pages 593-609, February.
    11. Tabea Bucher-Koenen & Annamaria Lusardi & Rob Alessie & Maarten van Rooij, 2017. "How Financially Literate Are Women? An Overview and New Insights," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(2), pages 255-283, July.
    12. Antonietta di Salvatore & Francesco Franceschi & Andrea Neri & Francesca Zanichelli, 2018. "Measuring the financial literacy of the adult population: the experience of the Bank of Italy," IFC Bulletins chapters, in: Bank for International Settlements (ed.), The role of data in supporting financial inclusion policy, volume 47, Bank for International Settlements.
    13. Declan French & Donal McKillop & Elaine Stewart, 2020. "The effectiveness of smartphone apps in improving financial capability," The European Journal of Finance, Taylor & Francis Journals, vol. 26(4-5), pages 302-318, March.
    14. Antonietta di Salvatore & Francesco Franceschi & Andrea Neri & Francesca Zanichelli, 2018. "Measuring the financial literacy of the adult population: the experience of Banca d�Italia," Questioni di Economia e Finanza (Occasional Papers) 435, Bank of Italy, Economic Research and International Relations Area.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Aristei & Manuela Gallo, 2021. "Financial Knowledge, Confidence, and Sustainable Financial Behavior," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
    2. Kenneth De Beckker & Kristof De Witte & Geert Van Campenhout, 2020. "The role of national culture in financial literacy: Cross‐country evidence," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 912-930, September.
    3. Sconti, Alessia, 2022. "Digital vs. in-person financial education: What works best for Generation Z?," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 300-318.
    4. Aristei, David & Gallo, Manuela, 2022. "Assessing gender gaps in financial knowledge and self-confidence: Evidence from international data," Finance Research Letters, Elsevier, vol. 46(PA).
    5. Susanna Levantesi & Giulia Zacchia, 2021. "Machine Learning and Financial Literacy: An Exploration of Factors Influencing Financial Knowledge in Italy," JRFM, MDPI, vol. 14(3), pages 1-21, March.
    6. Marco Bottone & Cristina Conflitti & Marianna Riggi & Alex Tagliabracci, 2021. "Firms' inflation expectations and pricing strategies during Covid-19," Questioni di Economia e Finanza (Occasional Papers) 619, Bank of Italy, Economic Research and International Relations Area.
    7. Di Bartolomeo, Giovanni & D'Imperio, Paolo & Felici, Francesco, 2022. "The fiscal response to the Italian COVID-19 crisis: A counterfactual analysis," Journal of Macroeconomics, Elsevier, vol. 73(C).
    8. Alessia Sconti, 2020. "Financial Literacy in Italy: What works among millennials most?," Working Papers 01/2020, University of Verona, Department of Economics.
    9. Andrej Cupak & Pirmin Fessler & Maria Antoinette Silgoner & Elisabeth Ulbrich, 2018. "Financial literacy in Austria: a survey of recent research results," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/18, pages 14-26.
    10. Alejandro Fernández-Cerezo & Beatriz Gonzalez & Mario Izquierdo Peinado & Enrique Moral-Benito, 2023. "Firm-level heterogeneity in the impact of the COVID-19 pandemic," Applied Economics, Taylor & Francis Journals, vol. 55(42), pages 4946-4974, September.
    11. Irene Bertschek & Joern Block & Alexander S. Kritikos & Caroline Stiel, 2022. "German Financial State Aid during COVID-19 Pandemic: Higher Impact among Digitalized Self-Employed," Discussion Papers of DIW Berlin 2018, DIW Berlin, German Institute for Economic Research.
    12. Sholevar, Maryam & Harris, Laurence, 2019. "Mind the gap: A discussion paper on Financial Literacy, Financial behaviour and Financial Education : Is there any Gender Gap?," OSF Preprints b7zd6, Center for Open Science.
    13. Panu Kalmi, 2018. "The Effects of Financial Education: Evidence from Finnish Lower Secondary Schools," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 47(2-3), pages 353-386, July.
    14. Rink, Ute & Walle, Yabibal M. & Klasen, Stephan, 2021. "The financial literacy gender gap and the role of culture," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 117-134.
    15. Ferragina, Anna Maria & Iandolo, Stefano, 2022. "Reacting to the economic fallout of the COVID-19: Evidence on debt exposure and asset management of Italian firms," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 530-547.
    16. AHMAD Idris & ALNI Rahmawati & ARNI Surwanti & MAMDUH M. Hanafi, 2023. "Financial Literacy To Improve Sustainability: A Bibliometric Analysis," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 18(3), pages 24-43, December.
    17. Lührmann, Melanie & Serra-Garcia, Marta & Winter, Joachim, 2015. "Teaching teenagers in finance: Does it work?," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 160-174.
    18. Mello, Marco & Moscelli, Giuseppe, 2022. "Voting, contagion and the trade-off between public health and political rights: Quasi-experimental evidence from the Italian 2020 polls," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1025-1052.
    19. Albert, Christoph & Caggese, Andrea & González, Beatriz & Martin-Sanchez, Victor, 2023. "Income inequality and entrepreneurship: Lessons from the 2020 COVID-19 recession," Journal of Banking & Finance, Elsevier, vol. 149(C).
    20. Frisancho, Veronica & Herrera, Alejandro & Prina, Silvia, 2023. "Can a mobile-app-based behavioral intervention teach financial skills to youth? Experimental evidence from a financial diaries study," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 595-614.

    More about this item

    Keywords

    financial literacy; digitalization; micro-firms; Covid 19;
    All these keywords.

    JEL classification:

    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:opques:qef_724_22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.