The Effect of Financial Knowledge, Attitudes, and Behaviors on the Success of Small and Medium Enterprises: The Case of Tunisian SMEs

Purpose: This study aims to rigorously and comprehensively assess the influence of financial literacy, encompassing financial knowledge, attitude, and behavior, on entrepreneurial performance and business sustainability. Focusing on the Tunisian context, it seeks to demonstrate that strengthening financial literacy is essential for improving entrepreneurs’ decision-making quality, performance, and long-term competitiveness. Design/Methodology/Approach: This research is grounded in an extensive review of the literature to identify the key dimensions of financial literacy affecting entrepreneurial performance. Empirically, a quantitative approach was adopted using a structured questionnaire administered to a sample of 131 Tunisian entrepreneurs. The collected data were analyzed using SPSS version 26. Principal Component Analysis (PCA) was employed to validate and reduce the dimensionality of financial literacy constructs, followed by linear regression analysis to examine the effect of financial knowledge, attitude, and behavior on entrepreneurial performance. Findings: The results reveal a significant and positive relationship between financial literacy and business performance. Specifically, entrepreneurs exhibiting higher levels of financial knowledge, positive financial attitudes, and sound financial behaviors achieve superior outcomes in terms of growth, profitability, and sustainability. These findings confirm the pivotal role of financial literacy in enhancing entrepreneurial success within the Tunisian economic context. Practical Implications: The findings underscore the importance of strengthening financial literacy among entrepreneurs to improve business performance. They provide a basis for designing targeted training programs and practical guidelines aimed at developing financial knowledge, fostering positive financial attitudes, and promoting responsible financial behaviors. Such initiatives can enhance business resilience and competitiveness, particularly in the Tunisian context. Originality/Value: This study contributes originally to the literature by offering an integrated analysis of financial literacy through its three dimensions—knowledge, attitude, and behavior—in a relatively underexplored context, namely Tunisia. By highlighting the critical role of financial literacy in entrepreneurial performance, the study enriches existing research and provides valuable insights for academics, policymakers, and entrepreneurship support institutions.