Financial Literacy and Performance of Smes in the State of Veracruz, Mexico
DOI:
https://doi.org/10.29105/revin20.40-432Keywords:
Financial literacy, Financial behavior, Financial knowledge, Financial attitude, SMEsAbstract
Recent research on financial literacy points out that it can be understood as a combination of financial knowledge, behavior, and attitudes. This paper examines in an exploratory manner the level of financial behavior, knowledge, and attitudes in micro, small, and medium-sized enterprises (MSMEs) and their correlation with performance in the state of Veracruz, Mexico. Surveys were conducted on a sample of 206 MSMEs in the municipalities of Veracruz and Coatzacoalcos. Following the methodology suggested by the Organisation for Economic Co-operation and Development, indices were constructed for financial knowledge, financial behavior, financial attitude, and business performance. The results showed that the level of knowledge obtained the lowest value among the surveyed MSMEs, while the level of attitudes obtained the highest value. The relationship between the variables was assessed using Pearson's correlation coefficient, showing a positive association between all three components of financial literacy. However, only the correlation between behavior and knowledge was statistically significant. Similarly, a positive and significant correlation was found between the level of financial behavior and the performance of the surveyed MSMEs. The findings suggest that financial behavior is the most important component for the performance of micro, small, and medium-sized enterprises.
Downloads
Metrics
References
Adomako, S., & Danso, A. (2014). Financial Literacy and Firm performance: The moderating role of financial capital availability and resource flexibility. International Journal of Management & Organizational Studies, 3(4) https://core.ac.uk/download/pdf/228187019.pdf
Bartlett, S. A., & Chandler, R. A. (1997). The corporate report and the private shareholder: Lee and Tweedie twenty years on. The British Accounting Review 29(3), 245-261. DOI: https://doi.org/10.1006/bare.1996.0044
Bayrakdaro, Ali, & Ş Botan. (2014). Financial Literacy Training As a Strategic Management Tool Among Small – Medium Sized Businesses Operating In Turkey. Procedia-Social and Behavioral Sciences. https://www.sciencedirect.com/science/article/pii/S187704281405068X DOI: https://doi.org/10.1016/j.sbspro.2014.09.019
Beal, D. J. & Delpachitra, S. B. (2003). Financial literacy among Australian University Students. Economic Papers, 22(1), 65-78. https://research.usq.edu.au/item/9y759/financial-literacy-among-australian-university-students DOI: https://doi.org/10.1111/j.1759-3441.2003.tb00337.x
Brown, R. B., Saunders, M. N. K., and Beresford, R. (2006). You owe it to yourself: The financially literate manager. Accounting Forum, 30(2), 179-191. https://doi.org/10.1016/j.accfor.2006.03.001 DOI: https://doi.org/10.1016/j.accfor.2006.03.001
Comisión Económica para América Latina y el Caribe. CEPAL (2018). Mipymes en América Latina: un frágil desempeño y nuevos desafíos para las políticas de fomento. Documentos de Proyectos (LC/TS.2018/75). https://www.cepal.org/es/publicaciones/44148-mipymes-america-latina-un-fragil-desempeno-nuevos-desafios-politicas-fomento
Comisión Nacional Bancaria y de Valores CEPAL (2019). Alfabetización Financiera en México. Serie Estudios de inclusión financiera. México. https://www.gob.mx/cms/uploads/attachment/file/613908/01_Indice_de_Alfabetizacion.pdf
Dahmen, Pearl & Rodríguez, Eileen. (2014). Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center. Numeracy: 7(1), Article 3. http://dx.doi.org/10.5038/1936-4660.7.1.3
Damayanti, R., Al-shami, S. S. A., Rahim, B., Rahim, A. B., Marwati, F. S., & Malaysia, M. (2018). Factors that influence financial literacy on small medium enterprises: A literature review. Opción, 34(86), 1540-1557. https://www.researchgate.net/publication/331823650
Eniola, A. A., & Entebang, H. (2016). Financial literacy and SME firm performance. International Journal of Research Studies in Management, 5(1), 31-43. Recuperado de: https://doi.org/10.5861/ijrsm.2015.1304 DOI: https://doi.org/10.5861/ijrsm.2015.1304
Eresia-Eke, C. & Raath, C. (2013). SMME Owners’ Financial Literacy and Business Growth. Mediterranean Journal of Social Sciences. 4(13). https://doi.org/10.5901/mjss.2013.v4n13p397 DOI: https://doi.org/10.5901/mjss.2013.v4n13p397
Fernandes, T. I. M. (2016). Financial literacy levels of small businesses owners and it correlation with firms' operating performance. https://repositorio-aberto.up.pt/bitstream/10216/81668/2/37453.pdf
Gavigan, K. (2010). Show me the money resources: Financial literacy for 21st century learners (pp. 28(25):24-27.): Library Media Connection.
Hung, A. A., Parker, A. M., & Yoong, J. (2009). Defining and measuring financial literacy. http://www.rand.org/content/dam/rand/pubs/working_papers/2009/RAND_WR708.pdf DOI: https://doi.org/10.2139/ssrn.1498674
Instituto Nacional de Estadística y Geografía. INEGI (2018) Encuesta Nacional sobre Productividad y Competitividad de las Micro, Pequeñas y Medianas Empresas. ENAPROCE.
Internacional Council for Small Business. ICSB (2018). Annual Global Micro, Small and Medium-sized Enterprises Report. ICSB. Recuperado de: https://icsb.org/wp-content/uploads/2019/09/REPORT-ICSB-2018.pdf
Lalinde, J. D. H., Castro, F. E., Rodríguez, J. E., Rangel, J. G. C., Sierra, C. A. T., Torrado, M. K. A., & Pirela, V. J. B. (2018). Sobre el uso adecuado del coeficiente de correlación de Pearson: definición, propiedades y suposiciones. Archivos venezolanos de Farmacología y Terapéutica, 37(5), 587-595. Recuperado de: https://www.redalyc.org/journal/559/55963207025/55963207025.pdf
Lusardi, A. (2011). Americans' financial capability (No. w17103). National Bureau of Economic Research. https://www.nber.org/papers/w17103 DOI: https://doi.org/10.3386/w17103
Lusardi, A., & Mitchell, O. S. (2011). Financial literacy around the world: An overview. Journal of Pension Economics & Finance, 10(4), 497-508. https://doi.org/10.1017/S1474747211000448 DOI: https://doi.org/10.1017/S1474747211000448
Lusardi, A. (2008). Financial literacy: an essential tool for informed consumer choice? (No. w14084). National Bureau of Economic Research. DOI: https://doi.org/10.3386/w14084
Mabula, J. B. (2016). Reviewing financial literacy for SMEs and entrepreneurs in developing economies. International Journal of Science and Research (IJSR), 5(6), 882-886. https://www.ijsr.net/archive/v5i6/NOV164309.pdf DOI: https://doi.org/10.21275/v5i6.NOV164309
Marcolin, S., & Abraham, A. (2006). Financial literacy research: Current literature and future opportunities. International Conference of Contemporary Business, Leura. https://ro.uow.edu.au/commpapers/223/
McDaniel, L., Martin, R. & Maines, L. (2002). Evaluating financial reporting quality: The effects of financial expertise vs. financial literacy. The Accounting Review, 77:139-167 DOI: https://doi.org/10.2308/accr.2002.77.s-1.139
Molina-García, A., Dieguez-Soto, J., Galache-Laza, M. T., & Campos-Valenzuela, M. (2023). Financial literacy in SMEs: a bibliometric analysis and a systematic literature review of an emerging research field. Review of Managerial Science, 17(3), 787-826. https://doi.org/10.1007/s11846-022-00556-2 DOI: https://doi.org/10.1007/s11846-022-00556-2
Musie, L. (2015). The use of financial literacy concepts by entrepreneurs in the small and medium enterprise sector in Mpumalanga Province, South Africa (Doctoral dissertation, University of Pretoria). http://hdl.handle.net/2263/52268
Nugraha, J., Suratman, B., Sriwulandari, S., Pahlevi, T., & Gita Miranti, M. (2019). Financial Literacy: An Empirical Study from Small–Medium Enterprises in Sidoarjo, East Java. KnE Social Sciences, 3(11), 1–8. https://doi.org/10.18502/kss.v3i11.399 DOI: https://doi.org/10.18502/kss.v3i11.3994
Nunoo, J., Andoh, F. K., (2012). Sustaining Small and Medium Enterprises through Financial Service Utilization: Does Financial Literacy Matter? Agricultural & Applied Economics Association's 2012 Annual Meeting, Washington. http://dx.doi.org/10.22004/ag.econ.123418
OECD (2018). Toolkit for Measuring Financial Literacy and Financial Inclusion.
OECD (2005). Financial Education Project: Background and Implementation. Recuperado de: http://www.oecd.org/daf/fin/financialeducation/oecdfinancialeducationprojectbackgroundandimplementation.htm
OECD-INFE (2011) Measuring Financial Literacy: Core Questionnaire inMeasuring Financial Literacy: Questionnaire and Guidance Notes for conducting an Internationally Comparable Survey of Financial literacy.Paris: OECD. Recuperado de: https://www.oecd.org/finance/financial-education/49319977.pdf
OECD-INFE (2018) Core Competencies Framework on Financial Literacy for MSMEs, OECD, https://www.oecd.org/finance/OECD-INFE-core-competencies-framework-on-financial-literacy-for-MSMEs.pdf
Pearl, D., & Eileen, R. g. (2014). Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center. Numeracy, 7(1). Recuperado de: https://digitalcommons.usf.edu/numeracy/vol7/iss1/art3/ DOI: https://doi.org/10.5038/1936-4660.7.1.3
President´s Advisory Council on Financial Literacy (2008). PACFL. Annual Report to the President. The department of the treasury Washington, DC.
Plakalović, N. (2015). Financial literacy of SMEs managers. In Management, Knowledge and Learning Joint International Conference. Recuperado de: http://www.toknowpress.net/ISBN/978-961-6914-13-0/papers/ML15-086.pdf
Purwidianti, W., & Tubastuvi, N. (2019). The effect of financial literacy and financial experience on SME financial behavior in Indonesia. JDM (Jurnal Dinamika Manajemen), 10(1), 40-45. https://journal.unnes.ac.id/nju/index.php/jdm/article/view/16937 DOI: https://doi.org/10.15294/jdm.v10i1.16937
Remund, D. L. (2010). Financial literacy explicated: The case for a clearer definition in an increasingly complex economy. Journal of Consumer Affairs, 44(2), 276–295. https://doi.org/10.1111/j.1745-6606.2010.01169.x DOI: https://doi.org/10.1111/j.1745-6606.2010.01169.x
Schuhen, M., & Schürkmann, S. (2014). Construct validity of financial literacy. International Review of Economics Education, 16, 1–1 DOI: https://doi.org/10.1016/j.iree.2014.07.004
SEFIPLAN (2019). Censos económicos. Resultados definitivos 2004-2019. Análisis Comparativo de Variables Económicas Básicas para Veracruz de Ignacio de la Llave. Secretaría de Finanzas y Planeación del Gobierno de Veracruz. http://ceieg.veracruz.gob.mx/wp-content/uploads/sites/21/2021/06/SEFIPLAN-2021-CensoEconm.An%C3%A1lisiEdoVeracruz.pdf
Usama, K. M., & Yusoff, W. F. W. (2018). The relationship between entrepreneurs’ financial literacy and business performance among entrepreneurs of Bauchi State Nigeria. International Journal of Entrepreneurship and Business Innovation, 1(1), 15-26. https://abjournals.org/ijebi/papers/volume-1/issue-1/the-relationship-between-entrepreneurs-financial-literacy-and-business-performance-among-entrepreneurs-of-bauchi-state-nigeria/
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Román Culebro-Martínez
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
La revista InnOvaciOnes de NegOciOs es sin fines de lucro y es una publicación de la Universidad Autónoma de Nuevo León en donde los autores ceden libremente los derechos sobre las obras que someten a evaluación y potencialmente a publicación.
Para efectos legales cada autor deberá llenar un formato para ceder los derechos a favor de la Universidad Autónoma de Nuevo León, en particular para la revista InnOvaciOnes de NegOciOs.
Para mayor información favor de comunicar a la Secretaria de Investigación de Facpya de la Universidad Autónoma de Nuevo León, o bien consultar alguno de las siguientes páginas Web:
Universidad Autónoma de Nuevo León/ Dirección de Investigación:
Página web: http://www.uanl.mx/universidad/investigacion/investigacion.html
