Abstract:

Entrepreneurship is receiving a lot of attention because of its great impact on jobs and economic growth. The topic of entrepreneurship education is well researched, but also controversial. Researchers are calling for more detailed studies of the knowledge and skills that lead people to become entrepreneurs. As a result, there is a growing interest in the concept of financial literacy among economists and management scholars. Financial literacy is often understood as the combination of awareness, knowledge, skills, attitudes, and behaviours needed to make informed financial decisions and achieve individual financial well-being (OECD, 2018). There has been a focus on understanding how financial literacy influences entrepreneurship. Despite this attention, the existing empirical evidence does not conclusively answer whether financial literacy increases the intention to start a new business and, crucially, how this link operates at the psychological level. This article addresses these gaps by rigorously investigating the impact of financial literacy (measured across financial knowledge, attitudes, and behaviours) on individuals' entrepreneurial intention and the mediating role of risk-taking propensity. The study adopts a mediation model and analyses 560 economics/business/finance undergraduates from three different Spanish public universities. Our results show a positive correlation between undergraduates' financial literacy and their entrepreneurial intention. Furthermore, they support that risk-taking propensity mediates the financial literacy-entrepreneurial intention relationship.

References:
[1] OECD (2018). OECD/INFE Toolkit for Measuring Financial Literacy and Financial Inclusion.

Keywords:

Entrepreneurial intention, Financial literacy, Risk-raking propensity, Undergraduates.