IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i21p14103-d956863.html

How Does Financial Literacy Affect Digital Entrepreneurship Willingness and Behavior—Evidence from Chinese Villagers’ Participation in Entrepreneurship

Author

Listed:
  • Xiaohong Xiao

    (School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Mei Yu

    (School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Hai Liu

    (School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China)

  • Qing Zhao

    (School of Business Administration, Guizhou University of Finance and Economics, Guiyang 550025, China)

Abstract

How financial literacy (FL) can contribute to both digital entrepreneurship (DE) willingness and behavior has become a widely concerned and controversial topic among scholars and practitioners, one that is particularly relevant for bottom of pyramid (BOP) entrepreneurs. However, existing literature has not established a systematic theoretical framework for this issue, and its internal mechanism has not been thoroughly revealed. Hence, based on behavioral finance theory and digital business-related literature, we construct a multi-layer linear and mediated-moderation model that relates latent variables of FL, financial inclusion (FI), digital literacy (DL), and DE. A total of 664 villagers carrying out DE are the sample from China, and the empirical results mainly reveal the following: FL significantly improves the DE willingness and behavior, and the sense of FI plays a partial mediating role between FL and DE willingness and behavior. DL is a crucial influencing factor that moderates a positive effect between FL and DE willingness and behavior. Moreover, DL plays a mediated-moderating role. By contrast, FL in poverty-stricken counties (PSC) has a more substantial influence on DE than that in non-poverty-stricken counties (NPSC). If the family background (social capital) is superior (excellent), and the resources are abundant, then the influence of FL on DE will be stronger. This research contributes to the theories and practices related to FL, DE, FI, and DL.

Suggested Citation

  • Xiaohong Xiao & Mei Yu & Hai Liu & Qing Zhao, 2022. "How Does Financial Literacy Affect Digital Entrepreneurship Willingness and Behavior—Evidence from Chinese Villagers’ Participation in Entrepreneurship," Sustainability, MDPI, vol. 14(21), pages 1-22, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:21:p:14103-:d:956863
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/21/14103/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/21/14103/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Fernandes & John G. Lynch & Richard G. Netemeyer, 2014. "Financial Literacy, Financial Education, and Downstream Financial Behaviors," Management Science, INFORMS, vol. 60(8), pages 1861-1883, August.
    2. 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.
    3. Mr. Kangni R Kpodar & Mihasonirina Andrianaivo, 2011. "ICT, Financial Inclusion, and Growth: Evidence from African Countries," IMF Working Papers 2011/073, International Monetary Fund.
    4. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    5. Jeffrey G. Covin & Dennis P. Slevin, 1989. "Strategic management of small firms in hostile and benign environments," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 75-87, January.
    6. Sutter, Christopher & Bruton, Garry D. & Chen, Juanyi, 2019. "Entrepreneurship as a solution to extreme poverty: A review and future research directions," Journal of Business Venturing, Elsevier, vol. 34(1), pages 197-214.
    7. Sigfusson, Thor & Chetty, Sylvie, 2013. "Building international entrepreneurial virtual networks in cyberspace," Journal of World Business, Elsevier, vol. 48(2), pages 260-270.
    8. Naved Hamid & Faizan Khalid, 2016. "Entrepreneurship and Innovation in the Digital Economy," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 273-312, September.
    9. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    10. Kangni Kpodar & Mihasonirina Andrianaivo, 2011. "ICT, Financial Inclusion and Growth: Evidence from African Countries," Post-Print halshs-00602411, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ana Belén Tulcanaza-Prieto & Alexandra Cortez-Ordoñez & Jairo Rivera & Chang Won Lee, 2025. "Is Digital Literacy a Moderator Variable in the Relationship Between Financial Literacy, Financial Inclusion, and Financial Well-Being in the Ecuadorian Context?," Sustainability, MDPI, vol. 17(6), pages 1-26, March.
    2. Kakizhanova Tolkyn & Utepkaliyeva Kansulu & Zeinolla Saule & Aben Assel & Ilyashova Guliya, 2025. "Impact of Digitalization, Economic Growth and Birth Rate on Female Labor Force: Evidence from Kazakhstan," Economics, Paradigm, vol. 13(2), pages 95-110.
    3. Ying Song & Junzhi Fu & Bowen Zhang & Liangliang Gao, 2025. "Evaluating state-driven e-commerce strategies for empowering disadvantaged rural entrepreneurs in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.

    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. Shahriar, Abu Zafar M. & Shukla, Avanish & Peranginangin, Yessy, 2025. "Gender, society, and financial inclusion: Evidence from matrilineal and patriarchal societies," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    2. Shulin Xu & Kangqi Jiang, 2024. "Knowledge creates value: the role of financial literacy in entrepreneurial behavior," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-17, December.
    3. Ngoc Duc Lang & Ha Mai Tran & Giang Tra Nguyen & Duc Hong Vo, 2024. "An Untapped Instrument in the Fight Against Poverty: The Impacts of Financial Literacy on Poverty Worldwide," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(2), pages 657-695, September.
    4. Amit Pandey & Ravi Kiran & Rakesh Kumar Sharma, 2022. "Investigating the Impact of Financial Inclusion Drivers, Financial Literacy and Financial Initiatives in Fostering Sustainable Growth in North India," Sustainability, MDPI, vol. 14(17), pages 1-21, September.
    5. Insoo Cho & Peter F. Orazem, 2021. "How endogenous risk preferences and sample selection affect analysis of firm survival," Small Business Economics, Springer, vol. 56(4), pages 1309-1332, April.
    6. Di Giannatale, Sonia & Roa, María José, 2016. "Formal Saving in Developing Economies: Barriers, Interventions, and Effects," IDB Publications (Working Papers) 8107, Inter-American Development Bank.
    7. Abdulqadir, Idris A. & Asongu, Simplice A., 2022. "The asymmetric effect of internet access on economic growth in sub-Saharan Africa," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 44-61.
    8. Richard M. Kiai & Stephen I. Ng’ang’a & David N. Kiragu & Josphat K. Kinyanjui, 2016. "The Effect of Business Environment on Investment among Financially Included Youth in Kenya," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(4), pages 109-121, October.
    9. Christian Lambert Nguena, 2019. "Working Paper 323- Mobile Financial and Banking Services Development in Africa," Working Paper Series 2449, African Development Bank.
    10. Talwar, Manish & Talwar, Shalini & Kaur, Puneet & Tripathy, Naliniprava & Dhir, Amandeep, 2021. "Has financial attitude impacted the trading activity of retail investors during the COVID-19 pandemic?," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    11. Hao Dong & Daniel L. Millimet, 2020. "Propensity Score Weighting with Mismeasured Covariates: An Application to Two Financial Literacy Interventions," JRFM, MDPI, vol. 13(11), pages 1-24, November.
    12. Samson Adewumi, 2024. "Level of Financial Literacy Skills and Managerial Decision Implication among University Managers," International Review of Management and Marketing, International Review of Management and Marketing, vol. 14(4), pages 1-11, July.
    13. Tochukwu Timothy Okoli & Ajibola Rhoda Oluwafisayomi, 2019. "Investigating the Banking Sector Development Transmission Mechanism of Financial Development to Growth: Evidence from Sub-Saharan Africa (SSA)," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 120-131.
    14. Norashikin Adam & Ngau Duo Seng & Norzahidah Binti Yacob & Mohd Sufian Ab Kadir, 2026. "Financial Literacy in the Era of Digital Finance: A Bibliometric Analysis and Future Research Agenda (2008–2026)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 10(3), pages 5952-5963, March.
    15. Gerrans, Paul, 2021. "Undergraduate student financial education interventions: Medium term evidence of retention, decay, and confidence in financial literacy," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    16. Ajoy Ketan Sarangi & Rudra Prakash Pradhan, 2020. "ICT infrastructure and economic growth: a critical assessment and some policy implications," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(4), pages 363-383, December.
    17. 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.
    18. 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.
    19. Ibrahim D. Raheem & Aviral K. Tiwari & Daniel Balsalobre-lorente, 2019. "The Role of ICT and Financial Development on CO2 Emissions and Economic Growth," Working Papers of the African Governance and Development Institute. 19/058, African Governance and Development Institute..
    20. E. Bonhoure & R. Bawack, 2024. "Review of the Coverage of Financial Inclusion Research Since the Implementation of the Sustainable Development Goals: What Has Changed?," Post-Print hal-04828293, HAL.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:gam:jsusta:v:14:y:2022:i:21:p:14103-:d:956863. 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: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    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.