IDEAS home Printed from https://ideas.repec.org/a/cwd/ijbmnz/v4y2025i2p441-469.html

Financial literacy as a catalyst for rational investment behavior: Evidence among university students in a crisis-affected economy

Author

Listed:
  • Mekdessi, Selim

    (Lebanese University)

  • Saliba, George

    (Lebanese University)

  • Makdissi, Elena

    (Lebanese University)

  • Makdissi, Riad

    (Lebanese University)

Abstract

This study investigates how financial literacy functions as a determinant of rational investment behavior among university students living in a crisis-affected economy. Although young adults increasingly confront complex financial choices, their capacity to navigate investment decisions remains uneven, particularly in contexts marked by economic volatility and institutional uncertainty. Drawing on a quantitative design, data were collected through a structured questionnaire administered to university students and analyzed using descriptive statistics, reliability testing, correlation analysis, t-tests, and simple linear regression. Financial literacy was examined through three interrelated dimensions, financial knowledge, financial behaviors, and financial attitudes, while investment-related decision tendencies served as outcome variables. The results reveal that higher levels of financial literacy are consistently associated with improved financial decision-making, stronger budgeting and saving practices, greater risk awareness, and more coherent investment attitudes. Students with formal exposure to financial education exhibited significantly more rational investment behavior than those without such training. These findings underscore the role of financial literacy as a critical capability that enables young individuals to evaluate investment opportunities, manage financial risks, and adopt informed financial strategies, even under adverse macroeconomic conditions. The study offers implications for universities, policymakers, and financial institutions seeking to enhance youth financial capability. Recommendations include integrating structured financial education programs and developing targeted interventions to strengthen students decision-making competencies.

Suggested Citation

  • Mekdessi, Selim & Saliba, George & Makdissi, Elena & Makdissi, Riad, 2025. "Financial literacy as a catalyst for rational investment behavior: Evidence among university students in a crisis-affected economy," International Journal of Business and Management (IJBM), International Emerging Scholars Society (IESS), New Zealand, vol. 4(2), pages 441-469, December.
    • Handle: RePEc:cwd:ijbmnz:v:4:y:2025:i:2:p:441-469
    DOI: 10.56879/ijbm.v4i2.242
    as

    Download full text from publisher

    File URL: https://iessociety.org/index.php/IJBM/article/download/208/58
    Download Restriction: no
    File URL: https://libkey.io/10.56879/ijbm.v4i2.242?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Oscar A. Stolper & Andreas Walter, 2017. "Financial literacy, financial advice, and financial behavior," Journal of Business Economics, Springer, vol. 87(5), pages 581-643, July.
    2. Chen, Haiyang & Volpe, Ronald P., 1998. "An Analysis of Personal Financial Literacy Among College Students," Financial Services Review, Elsevier, vol. 7(2), pages 107-128.
    3. Bernheim, B. Douglas & Garrett, Daniel M. & Maki, Dean M., 2001. "Education and saving:: The long-term effects of high school financial curriculum mandates," Journal of Public Economics, Elsevier, vol. 80(3), pages 435-465, June.
    4. Annamaria Lusardi, 2019. "Financial literacy and the need for financial education: evidence and implications," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 155(1), pages 1-8, December.
    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. repec:bcp:journl:v:9:y:2025:i:10:p:1395-1409 is not listed on IDEAS
    2. Sunwoo T. Lee & Kyoung Tae Kim, 2022. "A Decomposition Analysis of Racial/Ethnic Differences in Financial Knowledge and Overconfidence," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 815-831, December.
    3. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    4. Apiag, Claire Anne D. & Aquino, Michael P. & Cadungog, Nicole Shaine B. & Fuentes, Mary Joanne Jurika A. & Gorgonio, Althea Reann F. & Llamo, Xenia Flor D. & Manalo, Ariana Jemar B. & Orillo, Davie Ma, 2025. "Financial Literacy and Insurance Uptake Intention among Rural Area Families," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 1636-1661, April.
    5. Sam Allgood & William Bosshardt & Wilbert Van Der Klaauw & Michael Watts, 2011. "Economics Coursework And Long‐Term Behavior And Experiences Of College Graduates In Labor Markets And Personal Finance," Economic Inquiry, Western Economic Association International, vol. 49(3), pages 771-794, July.
    6. Baloch, Muhammad Ammar & Ali, Amjad & Audi, Marc, 2025. "The Impact of Financial Literacy on Investment Decisions: The Mediating Role of Peer Influence and the Moderating Role of Financial Status," MPRA Paper 127313, University Library of Munich, Germany.
    7. Jing Jian Xiao & Joyce Serido & Soyeon Shim, 2010. "Financial Education, Financial Knowledge and Risky Credit Behavior of College Students," NFI Working Papers 2010-WP-05, Indiana State University, Scott College of Business, Networks Financial Institute.
    8. Vitor Leone & Piers Thompson, 2024. "Financial literacy and advice perceptions among UK higher education students: an ethnicity tale?," Review of Economics of the Household, Springer, vol. 22(2), pages 709-781, June.
    9. Fuzhong Chen & Jingxin Lu & Jiaying Li & Wenting Wang & Horlane Bissielou, 2020. "Sustainable Financial Education and Consumer Life Satisfaction," Sustainability, MDPI, vol. 12(3), pages 1-21, February.
    10. Paola Bongini & Paolo Trivellato & Mariangela Zenga, 2015. "Business Students and Financial Literacy: When Will the Gender Gap Fade away?," Journal of Financial Management, Markets and Institutions, Società editrice il Mulino, issue 1, pages 13-30, June.
    11. Sicong Sun & Yu-Chih Chen & David Ansong & Jin Huang & Margaret S. Sherraden, 2022. "Household Financial Capability and Economic Hardship: An Empirical Examination of the Financial Capability Framework," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 716-729, December.
    12. Ester Muñoz-Céspedes & Raquel Ibar-Alonso & Sara de Lorenzo Ros, 2021. "Financial Literacy and Sustainable Consumer Behavior," Sustainability, MDPI, vol. 13(16), pages 1-21, August.
    13. Paul Gerrans & Richard Heaney, 2019. "The impact of undergraduate personal finance education on individual financial literacy, attitudes and intentions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(1), pages 177-217, March.
    14. Eleonora Patacchini & Edoardo Rainone, 2017. "Social Ties and the Demand for Financial Services," Journal of Financial Services Research, Springer;Western Finance Association, vol. 52(1), pages 35-88, October.
    15. Davoli, Maddalena & Hou, Jia, 2018. "Financial literacy and socialist education: Lessons from the German reunification," SAFE Working Paper Series 217, Leibniz Institute for Financial Research SAFE.
    16. Korkmaz, Aslihan Gizem & Yin, Zhichao & Yue, Pengpeng & Zhou, Haigang, 2021. "Does financial literacy alleviate risk attitude and risk behavior inconsistency?," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 293-310.
    17. Karthikeyan Shanmugam & Vijayabanu Chidambaram & Satyanarayana Parayitam, 2023. "Relationship Between Big-Five Personality Traits, Financial Literacy and Risk Propensity: Evidence from India," IIM Kozhikode Society & Management Review, , vol. 12(1), pages 85-101, January.
    18. Manuel Salas‐Velasco & Dolores Moreno‐Herrero & José Sánchez‐Campillo, 2021. "Teaching financial education in schools and students' financial literacy: A cross‐country analysis with PISA data," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4077-4103, July.
    19. Arturo García-Santillán & Francisco Venegas-Martínez & Ricardo Jacob Mendoza-Rivera, 2024. "Financial Literacy of Workers in the Tourism Industry in Mexico in 2023: a Structural Equations Approach," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 19(1), pages 1-15, Enero - M.
    20. Arceo-Gómez, Eva O. & Villagómez, F. Alejandro, 2017. "Financial literacy among Mexican high school teenagers," International Review of Economics Education, Elsevier, vol. 24(C), pages 1-17.
    21. Mölders, Marius & Bock, Lennart & Barrantes, Eloy & Zülch, Henning, 2025. "Understanding finfluencers: Roles and strategic partnerships in retail investor engagement," Journal of Business Research, Elsevier, vol. 198(C).

    More about this item

    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:cwd:ijbmnz:v:4:y:2025:i:2:p:441-469. 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: Cindy Liu (email available below). General contact details of provider: https://iessociety.org/ .

    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.