Business sustainability: Functions of financial behavior, technology, and knowledge
-
Author(s)Bambang WidagdoLink to ORCID Index: https://orcid.org/0000-0002-8177-0853
,
Chalimatuz Sa’diyahLink to ORCID Index: https://orcid.org/0000-0001-8572-2069
-
DOIhttp://dx.doi.org/10.21511/ppm.21(1).2023.11
-
Article InfoVolume 21 2023, Issue #1, pp. 120-130
- Cited by
- 1026 Views
-
478 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Micro, small, and medium-sized enterprises (MSMEs) are among the cornerstones of the Indonesian economy that managed to survive the world crisis. The development of MSMEs also demands that owners be ready to compete with other MSMEs. This study aims to analyze whether business sustainability is influenced by financial literacy with financial behavior and financial technology as mediators. The research sample includes owners and managers of MSMEs in Indonesia, totaling 342 respondents. Data collection methods used are non-probability sampling techniques by distributing questionnaires. This study uses SEM analysis with PLS analysis tools. It was found that financial literacy does not directly affect business sustainability but affects financial behavior and financial technology. Financial behavior and financial technology are proven to influence business sustainability. Furthermore, financial behavior and financial technology mediate the effect of financial literacy on business sustainability. The results of this study show that financial behavior and financial technology can fully mediate the relationship between financial literacy and business sustainability. Moreover, financial literacy cannot directly affect business sustainability, which must be fully mediated by financial behavior and financial technology. This study also provides practical value regarding the sustainability of MSMEs. Thus, companies can survive in the long term not only with a robust financial literacy foundation but they must be supported by good financial behavior and also be able to choose the right financial technology in their business activities.
- Keywords
-
JEL Classification (Paper profile tab)G40, G53, D91
-
References46
-
Tables8
-
Figures2
-
- Figure 1. Conceptual framework
- Figure 2. PLS algorithm processing results
-
- Table 1. Respondent demographics
- Table 2. Convergent validity
- Table 3. Reliability test
- Table 4. Outer loading of financial literacy
- Table 5. Outer loading of financial behavior
- Table 6. Outer loading of financial technology
- Table 7. Outer loading of business sustainability
- Table 8. Direct and indirect impact
-
- Arianti, B. F. (2020). Pengaruh pendapatan dan perilaku keuangan terhadap literasi keuangan melalui keputusan berinvestasi sebagai variabel intervening. Jurnal Akuntansi, 10(1), 13-36. (In Indonesian).
- Asianti, D., Ngadi N., Aini, Y. N., & Purba, Y. A. (2021). Sustainability of MSMEs in Indonesia: Learnings from COVID-19 impact. In N. Baporikar (Ed.), Handbook of research on sustaining SMEs and entrepreneurial innovation in the post-COVID-19 era (pp. 504-526). IGI Global.
- Azarenkova, G., Golovko, O., & Abrosimova, K. (2018). Management of enterprise’s financial sustainability and improvement of its methods. Problems and Perspectives in Management, 2(1), 1-14.
- Cahuana, W., & Rojas, H. (2020). Means of payment for e-commerce in SME’s in Peru. ICIBE 2020: 2020 The 6th International Conference on Industrial and Business Engineerin (pp. 174-179).
- Cooper, D. R., & Schindler, P. S. (2014). Business research method (12th ed.). New York: McGraw Hill.
- Darma, D. C., Lestari, D., & Muliadi, M. (2020a). FinTech and micro, small and medium enterprises development. Entrepreneurship Review, 1(1), 1-9.
- Darma, D. C., Lestari, D., & Muliadi, M. (2020b). The influence of financial literacy on SMEs performance through access to finance and financial risk attitude as mediation variables. Academy of Accounting and Financial Studies Journal, 24(5), 1-16.
- Deuflhard, F., Georgarakos, D., & Inderst, R. (2015). Financial literacy and savings account returns (ECB Working Paper No. 1852).
- Durana, P., Valaskova, K., Vagner, L., Zadnanova, S., Podhorska, I., & Siekelova, A. (2020). Disclosure of strategic managers’ factotum: Behavioral incentives of innovative business. International Journal of Financial Studies, 8(1), 17.
- Febriani, R., & Sa’diyah, C. (2021). Exploring Islamic leadership on SME performance: Mediated by innovative work behavior and financial technology. Jurnal Aplikasi Manajemen, 19(3), 495-506.
- Haddad, C., & Hornuf, L. (2019). The emergence of the global fintech market: Economic and technological determinants. Small Business Economics, 53, 81-105.
- Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2014). Multivariate data analysis (7th ed.). Essex: Pearson Education.
- Hastings, J., & Mitchell, O. S. (2020). How financial literacy and impatience shape retirement wealth and investment behaviors. Journal of Pension Economics and Finance, 19(1), 1-20.
- Henager, R., & Cude, B. J. (2019). Financial literacy of high school graduates: Long- and short-term financial behavior by age group. Journal of Family and Economic Issues, 40(3), 564-575.
- Hikmah, R., Djuwita, D., & Widagdo, R. (2019). Effect of financial literation and financing-effectivity toward the growth of small enterprises: Case study in bank Syariah Mandiri, Majalengka. AL-FALAH: Journal of Islamic Economics, 4(2), 163-180.
- Hilabi, I. I., Saputra, A. R., Sa’diyah, C., & Nurhasanah, S. (2021). Communicative action: Correlation of leadership principles in the viewpoint of Muhammad Rasulullah and J. Habermas. Technium Social Sciences Journal, 22(1), 350-361.
- Hu, Z., Ding, S., Li, S., Chen, L., & Yang, S. (2019). Adoption intention of fintech services for bank users: An empirical examination with an extended technology acceptance model. Symmetry, 11(3), 340.
- Klapper, L., & Lusardi, A. (2020). Financial literacy and financial resilience: Evidence from around the world. Financial Management, 49(3), 589-614.
- Lusardi, A. (2019). Financial literacy and the need for financial education: Evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1-8.
- Lyons, A. C., Kass-Hanna, J., Liu, F., Greenlee, A. J., & Zeng, L. (2020). Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa (ADBI Working Papers No. 1098). Tokyo: Asian Development Bank Institute.
- Morgan, P. J., & Long, T. Q. (2020). Financial literacy, financial inclusion, and savings behavior in Laos. Journal of Asian Economics, 68, 101197.
- Noor, M., Fourqoniah, F., & Aransyah, M. F. (2020). Investigation of financial inclusions, financial literation, and financial technology in Indonesia. Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 8(3), 257-268.
- Nurohman, Y. A., Kusuma, M., & Narulitasari, D. (2021). Fin-Tech, financial inclusion, and sustainability: A quantitative approach of Muslims SMEs. International Journal of Islamic Business Ethics, 6(1), 54-67.
- Pikus, R., Prykaziuk, N., & Balytska, M. (2018). Financial sustainability management of the insurance company: Case of Ukraine. Problems and Perspectives in Management, 15(4), 219-228.
- Purnamasari, I., Hernawan, D., & Hastuti, S. (2022). MSME policy based on cost reduction strategies during the COVID-19 pandemic. KnE Social Sciences, 7(5), 350-356.
- Purwidianti, W., & Tubastuvi, N. (2019). The effect of financial literacy and financial experience on SME financial behavior in Indonesia. Jurnal Dinamika Manajemen, 10(1), 40-45.
- Ravikumar, T., Sriram, M., Kannan, N., Elias, I., & Seshadri, V. (2022). Relationship between financial stress and financial well-being of micro and small business owners: Evidence from India. Problems and Perspectives in Management, 20(4), 306-319.
- Sabri, M. F., Cheng Xi Aw, E., Abdul Rahim, H., Burhan, N. A. S., Othmana, M. A., & Simanjuntak, M. (2021). Financial literacy, behavior and vulnerability among Malaysian households: Does gender matter? International Journal of Economics and Management, 15(2), 241-256.
- Sarjono, A. U., Yoseba, S. A., Hafidh, M. A., Nur Rizky FT, R., Syafiq Abdillah U., & Hidayanto, A. N. (2022). Factors influencing continuance intention of complaint service: A case study of QLUE. Jurnal Sisfokom (Sistem Informasi Dan Komputer), 11(2), 282-288.
- Schammo, P. (2019). ‘Undisruption’ in the SME funding market: Information sharing, finance platforms and the UK bank referral scheme. European Business Organization Law Review, 20(1), 29-53.
- Shankar, N., Vinod, S., & Kamath, R. (2022). Financial well-being – A Generation Z perspective using a structural equation modeling approach. Investment Management and Financial Innovations, 19(1), 32-50.
- Shneor, R., & Munim, Z. H. (2019). Reward crowdfunding contribution as planned behaviour: An extended framework. Journal of Business Research, 103, 56-70.
- Sorongan, F. A. (2022). The influence of behavior financial and financial attitude on investment decisions with financial literature as moderating variable. European Journal of Business and Management Research, 7(1), 265-268.
- Subagiyo, D. T. (2021). Characteristics of financial technology as financing alternative capitalization of medium small-medium enterprises (MSME). Fiat Justisia: Jurnal Ilmu Hukum, 15(2), 133-158.
- Sugiyanto, T., Radianto, W. ED., Efrata, T. C., & Dewi, L. (2019). Financial literacy, financial attitude, and financial behavior of young pioneering business entrepreneurs. Proceedings of the 2019 International Conference on Organizational Innovation (ICOI 2019) (pp. 353-358). Atlantis Press.
- Susan, M. (2020). Financial literacy and growth of micro, small, and medium enterprises in West Java, Indonesia. In W. A. Barnett & B. S. Sergi (Eds.), Advanced issues in the economics of emerging markets (International Symposia in Economic Theory and Econometrics, 27) (pp. 39-48). Bingley: Emerald Publishing Limited.
- Tumba, N. J., Onodugo, V. A., Akpan, E. E., & Babarinde, G. F. (2022). Financial literacy and business performance among female micro-entrepreneurs. Investment Management and Financial Innovations, 19(1), 156-167.
- Ubaidillah, M. (2020). Menjaga keberlangsungan umkm pada masa wabah Covid-19. Inventory: Jurnal Akuntansi, 4(2), 166-174. (In Indonesian).
- Urban, C., Schmeiser, M., Collins, J. M., & Brown, A. (2020). The effects of high school personal financial education policies on financial behavior. Economics of Education Review, 78, 101786.
- Wati, L. N., Isprihayadi, H., Nisa, K., Lutfi, M., & Suprapta, I. (2020). Financial technology and financial inclusion on MSME: Mixed-method research approach. Moneter – Jurnal Akuntansi Dan Keuangan, 7(2), 232-236.
- Widagdo, B., & Roz, K. (2022). The role of personality traits, financial literacy and behavior on investment intentions and family support as a moderating variable. Investment Management and Financial Innovations, 19(2), 143-153.
- Widagdo, B., & Sa’diyah, C. (2022). Financial distress, dividend policy, RGEC and earning per share. Trikonomika, 21(1), 37-45.
- Wiyono, G., & Kirana, K. C. (2021). Digital transformation of SMEs financial behavior in the new normal era. Jurnal Keuangan Dan Perbankan, 25(1), 191-211.
- Ye, J., & Kulathunga, K. M. M. C. B. (2019). How does financial literacy promote sustainability in SMEs? A developing country perspective. Sustainability, 11(10), 2990.
- Yuliani, Y., Fuadah, L. L., & Taufik. (2019). The effect of financial knowledge on financial literacy with mediated by financial behavior in society of Palembang City South Sumatera. Mix: Jurnal Ilmiah Manajemen, 9(3), 421-430.
- Zhao, H., & Zhang, L. (2020). Talking money at home: The value of family financial socialization. International Journal of Bank Marketing, 38(7), 1617-1634.
-
Fintech in the eyes of Millennials and Generation Z (the financial behavior and Fintech perception)
Mohannad A. M. Abu Daqar ,
Samer Arqawi ,
Sharif Abu Karsh
doi: http://dx.doi.org/10.21511/bbs.15(3).2020.03
Banks and Bank Systems Volume 15, 2020 Issue #3 pp. 20-28 Views: 6027 Downloads: 2107 TO CITE АНОТАЦІЯThis study investigates the Millennials and Gen Z perception toward Fintech services, their usage intention, and their financial behavior. The study took place in the Palestinian context with a global comparison among these generations. The authors used the questionnaire-based technique to meet the study objective. West Bank respondents were selected for this purpose; the study instrument was distributed through different social media channels. The findings show that reliability/trust and ease of use are the main issues in using a financial service. Millennials are more aware (48%) of Fintech services than Gen Z (38%), which is different from the global view where Gen Z is the highest. The smartphone penetration rate is 100% among both generations, while the financial inclusion ratio in Palestine is around 36.4%; these clear indicators are the main Fintech drivers to promote Fintech services in Palestine, and these are global indicators for Fintech adoption intention. Both generations (84%) intend to use e-wallet services, Millennials (87%) and Gen Z is (70%) prefer using real-time services. Half of the respondents see that Fintech plays a complementary role with banks. The majority see that Fintech services are cheaper than bank services. Wealth management, and robot advisor services, and both generations are looking to acquire them in the long run. The authors revealed that 85% of respondents from both generations trust banks, so it is recommended that banks digitize their financial services to meet the customers’ needs, considering that 90% of respondents see that promotions are a key issue in adopting Fintech services. Promoting e-wallet services by banks is highly recommended due to the massive rivalry with Fintech parties.
-
Industrial development in Saudi Arabia: disparity in growth and development
Anis Ali
doi: http://dx.doi.org/10.21511/ppm.18(2).2020.03
Problems and Perspectives in Management Volume 18, 2020 Issue #2 pp. 23-35 Views: 2956 Downloads: 1005 TO CITE АНОТАЦІЯIndustrial development in any nation plays a vital role in the strengthening of the economy and employs human resources as per specifications and directly towards the mainstream of the nation. In Saudi Arabia, there was rapid industrialization for four decades. Some manufacturing industries performed well, while some internal and external business environment factors influenced the others’ performance. The study focuses on historical development, as well as recent trends of well-performing and poor-performing industries of Saudi Arabia. Small manufacturing industries in Saudi Arabia are underdeveloped and need more attention to attain sustainable and progressive growth rate in the form of the number of establishments to enjoy the potential. Manufacture of tobacco, computer, electronics and optics, pharmaceuticals and transport equipment are the deprived and underdeveloped industries of the manufacturing sector. There should be some easy credit schemes for the development of deprived or underdeveloped manufacturing industries. To attain sustainable growth and development of the manufacturing sector, a positive attitude of the government towards underdeveloped manufacturing industries, favorable labor laws, and entrepreneurial awareness, technical and financial assistance are necessary. The growth and development of the manufacturing sector of Saudi Arabia will be helpful in the attainment of goals of Vision 2030.
-
Determinants of dividend policy
Asma Salman
doi: http://dx.doi.org/10.21511/imfi.16(1).2019.13
Investment Management and Financial Innovations Volume 16, 2019 Issue #1 pp. 167-177 Views: 2947 Downloads: 633 TO CITE АНОТАЦІЯPakistan’s capital market and economy have significant features for examining the dynamics of the dividend policy. The agency conflicts between the management and the investors of the firms are main barriers to the success of the firm. The shareholder is generally taking away all the rights and similarly has a control on the decision concerning the dividend policy. The dividends are conveying better information than any other source regarding the firm’s prospects. The aim of this research is to identify and analyze the influence of shareholder preference and dividend signaling on the dividend policy of the corporations in Pakistan. The respective study presents the analysis of top financial management beliefs by taking eighty listed corporations on Pakistani stock exchanges during 2017–2018. Pearson correlation and multiple regressions are applied on responses to explore whether there is an influence regarding the shareholder preferences and the signaling mechanism on the dividend policy of the listed firms in Pakistan. Through statistical techniques the findings proved that shareholder preferences and dividend signaling have a positive and significant relationship with the dividend policy of listed corporations. Dividend policy is the response of investor preferences and signaling aspect of dividends.
