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Perceived financial scarcity leads to financial avoidance: the mediation of financial self-efficacy and financial risk avoidance

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  • Wang, Xue
  • Guo, Xueli
  • Chen, Wei-Fen
  • Wu, Qinglu
  • Su, Song

Abstract

While the extant literature suggests that financial scarcity is linked to the avoidance of financial activities, we explore whether and why this relationship persists even when such activities are beneficial for alleviating financial scarcity. By conducting seven studies, we show that the relationship persists even when the financial activities are beneficial for alleviating scarcity and remains after controlling for factors such as financial literacy and debt (Studies 1A and 1B). This relationship is further validated in a field setting (Study 2) and in experiments where perceived financial scarcity is manipulated (Studies 3 to 5B). Impaired financial self-efficacy and increased financial risk aversion mediate this effect (Study 4). Moreover, this effect is reversed when financial self-efficacy is enhanced (Study 5A) and attenuated when the perceived risk of financial activity is reduced (Study 5B). The implications for policy interventions, consumer coping strategies, and financial well-being are discussed.

Suggested Citation

  • Wang, Xue & Guo, Xueli & Chen, Wei-Fen & Wu, Qinglu & Su, Song, 2026. "Perceived financial scarcity leads to financial avoidance: the mediation of financial self-efficacy and financial risk avoidance," Journal of Business Research, Elsevier, vol. 212(C).
    • Handle: RePEc:eee:jbrese:v:212:y:2026:i:c:s0148296325007660
    DOI: 10.1016/j.jbusres.2025.115943
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