The antecedents and consequences of financial literacy: a meta-analysis

Abstract

Purpose The purpose of this paper is to determine the antecedents and consequences of financial literacy by using meta-analytic techniques. Design/methodology/approach The authors conducted a meta-analysis of 44 valid studies, which generated a total of 690 observations (effect sizes). Findings The findings showed that the factors influencing financial literacy were as follows: educational level, financial attitude, financial knowledge, financial behaviour, gender, household income and investments. The consequences of financial literacy were the behaviour of incurring avoidable credit and checking fees, credit score, and the willingness to take investment risks. The authors also find some methodological, cultural, economic and theoretical moderations effects between financial literacy and antecedent/consequent constructs. Research limitations/implications This meta-analysis reviewed the relationships found worldwide in the literature on financial literacy. The authors also identified new avenues for future research. Some specific limitations, such as the non-use of qualitative studies, are registered. Originality/value This research tested the impact of the antecedents, consequences and moderators of financial literacy via a meta-analytical review. This meta-analysis contributes to the marketing and financial literature by offering a set of empirical generalisations about the direct and moderation effects investigated.

Financial literacy: A systematic review and bibliometric analysis

“…Some empirical papers examine the demographic, socio‐economic, personal, structural and cultural factors affecting financial literacy. Major factors determining financial literacy are gender, education, income, household investments, financial knowledge, financial attitude and financial behaviour (Santini et al., 2019). Regional differences in the environment one lives in impact financial literacy index, along with demographic and socio‐economic factors (Cucinelli, Trivellato, & Zenga, 2019).…”

“…This definition was further expanded to financial capability according to which a financially capable person has an understanding of credit, debt, budget, insurance and all other financial dimensions. Positive financial behaviour is found to be a culmination of financial literacy (Santini, Ladeira, Mette, & Ponchio, 2019) and such behaviour is also influenced by a number of unexplored factors (Riitsalu & Põder, 2016). The lifecycle model developed by Lusardi and Mitchell (2014) suggests that people who receive financial education perform better than those who don't.…”

Improving financial capability: the mediating role of financial behaviour

“…A recent focus is turning attention towards financial capability measurement. There is scope to expand related studies to compare and establish the rationale behind financial capability advent (Kempson et al, 2013;Luukkanen & Uusitalo, 2019;Santini et al, 2019).…”

“…A report from OECD (2013) defines financial literacy as a mixture of skill, behaviour, awareness, attitude, and knowledge, which are essential for sound financial decisions making for an individual to achieve the state of financial well-being. Many scholars and experts stated that financial literacy is inclusive of the three components: financial attitude, financial knowledge, and financial behaviour (Atkinson & Messy, 2012;Garg & Singh, 2018;Huston, 2010;Potrich et al, 2015;Santini et al, 2019). Thus, the above expositions expressed that financial literacy covered three broad concepts: financial attitude, financial knowledge, and financial behaviour.…”

Women’s financial well‐being: A systematic literature review and directions for future research

“…Psychological elements such as attitudes, skills, motivations and personality traits may explain differences in the financial wellbeing of individuals in similar sociodemographic environments and moments of life (Brüggen et al, 2017). The reviewed studies show that, regardless of the concept or measurement tool used, women's financial knowledge has been shown to be equal to or lower than, but not greater than, that of men (Al-Bahrani et al, 2020;Chambers et al, 2019;Gerrans et al, 2014;Karakurum-Ozdemir et al, 2019;Kirbiš et al, 2017;Santini et al, 2019). For example, Karakurum-Ozdemir et al (2019) found that women have lower levels of financial knowledge in four of the five developing countries studied and the gender gap was not affected by educational differences between men and women but was reduced when income was controlled.…”