The Effects of Financial Education on the Financial Knowledge of High School Students

This study investigated the effects of a financial education program on high school students' knowledge of personal finance. A comparison of pretest and posttest scores achieved on a reliable and valid thirty-item instrument suggested that the Financing Your Future curriculum increased financial knowledge across many concepts. The scores increased regardless of the course in which the curriculum was used and across student characteristics. The assessment contributes to the growing literature showing that a well-specified and properly implemented program in financial education can positively and significantly influence the financial knowledge of high school students.     

Personal finance blogs: Helpful tool for consumers with low financial literacy or preaching to the choir?

Recent transitions from defined benefit to defined contribution plans assign greater individual responsibility to consumers to prepare for retirement and make consequential financial choices. However, many consumers are ill‐equipped to do so, considering overall low levels of financial literacy. At the same time, there is increasing controversy about the effectiveness of traditional financial education, such as high school financial education, counselling and seminars or workshops. Alternative sources of (just‐in‐time) financial training or advice may be needed to financially empower consumers and help them make important financial decisions. In the light of these developments, this study investigates if consumers perceive personal finance blogs as a helpful alternative in acquiring financial knowledge, and which factors influence perceived helpfulness of and intention to use personal finance blogs. Using Structural Equation Modelling to analyse data from a sample of U.S. consumers, the results of this study uncover that financial literacy and susceptibility to informational influence have a significant positive association with perceived helpfulness. Perceived financial uncertainty, which refers to uncertainty in terms of consumers’ perceived ability to accurately predict their future financial needs, has a significant negative association with perceived helpfulness of and intention to use personal finance blogs. Finally, perceived helpfulness of a personal finance blog is a significant positive predictor of consumers’ intention to use it. Overall, the findings suggest that personal finance blogs are preaching to the choir, since the consumers who are most likely to use personal finance blogs seem to need them the least given their higher levels of financial literacy and lower levels of perceived financial uncertainty. Taken together, the findings shed light on the potential users of personal finance blogs and underline the challenges of a ‘one‐size‐fits‐all’ financial education. This study aids in assessing personal finance blogs as an online resource which is scarcely researched, but which has the potential to provide just‐in‐time financial education to consumers across the world.     

The Impact of Professional Commitment and Anticipatory Socialization on Accounting Students’ Ethical Orientation

The accounting profession has emphasized the need for ethics education in the accounting curriculum. The current study examines professional commitment and anticipatory socialization, operationalized by perception of financial reporting, as possible determinants of Accounting students’ ethical perceptions and intentions. Accounting students with higher levels of professional commitment and higher perception of the importance of financial reporting were more likely to perceive questionable actions as unethical and less likely to engage in such actions compared to those students with lower commitment and lower perception of financial reporting. The results have implications for accounting instructors and accounting employers as they socialize students in the accounting profession at this early stage.     

Realising Central Banks’ Climate Ambitions Through Financial Stability Mandates

This paper discusses how financial stability governance has evolved and how central banks and financial regulators are coping with the threats posed by climate uncertainty, providing an overview of G20 countries’ green central banking experiences in the past 20 years. The analysis shows that most central banks realise their climate ambitions through financial stability mandates, leaving the monetary stability mandate unaffected. Considering the debate on market neutrality, the concerns on the risk of overstretching the central banks’ mandate, violation of Tinbergen’s principle and threats posed to central banks’ independence, the provided evidence reveals a mismatch between the observed policy practice and its theoretical underpinnings. Drawing on these findings, we argue that effective green central banking governance should be based on a synthesis between monetary and macroprudential policymaking.

     

Organizational Culture in the Financial Sector: Evidence from a Cross-Industry Analysis of Employee Personal Values and Career Success

We assess the organizational culture in the finance industry in relation to the global financial crisis and consider the potential of cultural change to improve the financial sector. To avoid (response) biases, we build on the person–organization fit literature and develop a novel, indirect method for assessing organizational culture that revolves around relationships between employees’ personal traits and their career success in the industry or organization under study. We analyze personal values concerning the pursuit of private gain (self-enhancement values) versus personal values concerning caring for others (self-transcendence values) and consider whether employees that value self-enhancement more and self-transcendence less enjoy more career success relative to their peers when working in finance than when working in other industries. Results do not reveal any sort of cross-industry differences that would implicate the finance industry’s culture in the financial crisis. Instead, we find the opposite, namely that strong self-enhancement values and weak self-transcendence values go together with less career success in the finance industry compared to other industries. Hence, if anything, the culture in the finance industry does not seem to resonate well with professionals that seek to pursue personal gain at the expense of clients’ welfare. Implication is that cultural change has little potential to improve the financial system. Meanwhile, the method for assessing organizational culture indirectly by analyzing relationships between employees’ traits and their career outcomes has wider applicability, particularly when relying on scores or measures obtained directly from the people concerned is likely to render biased evidence.     

Indoctrination or education? Intention of unqualified teachers to transfer consumption norms in home economics teaching

Almost two thirds of home economics (HE) teachers in Sweden are formally unqualified (FU). Historically, HE has focused more on fostering and prescribing the ‘right’ choices whereas the modern (2011‐) curriculum focuses on teaching consequences of choices and giving students tools for assessing alternatives. Restraining from prescribing norms requires a high degree of professionalism. The objective of this study was to empirically investigate the prevalence of intentions of FU teachers to prescribe consumption norms not supported by the curriculum. Furthermore, to investigate to what extent these intentions are correlated with years of experience as a teacher, personal preferences, or personal consumption. The intention to transfer norms were measured using the concept of intentional misalignment applied to a survey distributed to a sample of FU teachers attending complementary teacher education. A two part survey was used. The first part consisted of multiple choice questions asking the teachers how important they saw it to transfer different consumption norms to their students (e.g. to consume local or organic food). These responses were evaluated quantitatively (Spearman rank correlation, Wilcoxon rank sum test and Kruskal‐Wallis analysis of variance). The second part consisted of an open‐ended question asking teachers to describe what they saw as the most important take‐home message for students in HE. The answers were compared to the national curriculum to identify intentions to transfer unsupported norms. The study indicates that more than a third of the FU HE teachers in Sweden express the intention to prescribe specific types of consumption or to transfer consumption norms that are not supported by the curriculum. The prevalence is correlated to personal preferences and thus indicates difficulties with keeping a professional perspective. These teachers must be given collegial support and opportunities for continued education–to ensure high‐quality HE education for future generations.     

Financial literacy among university students: A study in eight European countries

This study analysed the level of financial literacy among university students in Estonia, Germany, Italy, Netherlands, Poland, Romania, Russian Federation and Turkey. The purpose of the study was to determine the level of financial literacy among university students, and to find out the relationship between financial knowledge and demographic characteristics of students. Online survey instrument was used to collect data. 409 fully completed questionnaires were accepted for analysis. Logistic regression was used to analyse of impact of the demographic characteristics on financial literacy. Overall mean of correct answers for the survey was 72.2%. This result represents a medium level of financial literacy about personal finance. Results indicate that male students, business major students, PhD students, those who live in a rental house, those whose parents have high level income, those who get advice on financial matters from their friends, those who took financial course before, those who get financial information about financial issues from university education, and students from Poland are more knowledgeable on personal finance. More financial courses should be provided in university education programmes, which could help more students handle their finances better and improve their financial wellbeing. It should be taken into consideration that in recent years, environmental and technological influences on financial literacy may be more important than parental influence.     

Configurational characteristics of mandate portfolios and their impact on foreign subsidiary survival

This study examines how the composition of subsidiaries’ mandates affects their survival, by investigating the configurational characteristics of mandate portfolios. Examining data from 1991 to 2017 on 14,952 foreign subsidiaries of 4,877 multinational enterprises reveals that while having a mandate portfolio with greater scope in relation to same-parent subsidiaries enhances the survivability of foreign subsidiaries, the effect is weakened when the portfolio has a higher degree of overlap with those of other same-parent subsidiaries. Conversely, when a subsidiary’s mandate portfolio puts a greater emphasis on the multinational enterprise’s (MNE) global value-chain activities, its effect on subsidiary survival is strengthened.     

Financial capability of student loan holders who are college students,graduates, or dropouts

Effective consumer financial education provides relevant information to meet special needs of targeted audiences. The purpose of this study is to examine differences in financial capability among student loan holders who are college students, graduates, and dropouts. Using data from the 2015 U.S. National Financial Capability Study, the results show that student loan holders who have completed their education program have higher scores in all financial capability indicators than college students and dropouts. Further analyses show differences in specific financial knowledge items among college students, graduates, and dropouts. In addition, college graduates are more likely to perform several specific desirable financial behaviors than college students and dropouts. The findings suggest that financial educators should emphasize action taking when they provide financial education for student loan holders who are college students and dropouts.     

Money talks – a program to improve financial literacy of teens

Many researchers have studied and documented the financial literacy of youth. Even more have developed educational programs or curricula to teach financial and consumer issues to youth; however, few have actually evaluated the effectiveness of their programs. The Money Talks: Should I be Listening? curriculum, developed by a University of California Cooperative Extension team, was created to appeal to teenagers as it increased their financial literacy. In order to develop a program that young people would readily use, and from which they would learn, teenagers were surveyed prior to program development to determine the topics that were relevant to them, the educational format that appealed to them, and when and where they preferred to receive the information (Varcoe, Peterson, Garrett, Martin, Rene, & Costello, 2001). This paper discusses the effectiveness of The Money Talks: Should I be Listening? curriculum on the financial knowledge and behaviour of participants using the series. The curriculum was designed for use as a part of school curriculum as well as for presentation in other venues. The findings indicate that using the curriculum did improve the financial literacy of high school students with significant positive changes in both knowledge and behaviour. They have a better understanding of the value of savings and have changed behaviours. It is interesting to note that the males demonstrated a significantly greater increase in knowledge from pre‐test to post‐test than females. Perhaps the females have more interest in or knowledge of financial issues prior to participation in this project? Overall the results of this study are consistent with the findings of others. Research based curricula in personal finance seem to yield results. This age group has specific requirements for method of delivery and location of the seminars suggesting that it is important to keep the materials interactive. To address this issue, a web‐site http:www.moneytalks.ucr.edu was added to the program. Included on the web‐site are interactive games and a video on the importance of saving. The teens are naturally more interested in learning about the consumer and financial issues they perceive as salient in their lives at that particular time. Educators should identify topics of interest to the teens and develop, or use existing, interactive methodology to present the information.     

A glimpse of the complexity of factors that influence financial literacy

Financial literacy has been recognised as a vital life skill, but there is little evidence of the factors behind the differences in managing personal finance. Socio‐economic factors and the provision of financial education do explain the variance in financial literacy in some countries, but not in all. In the PISA 2012 financial literacy test, Estonian students ranked very highly in international comparison; although only a few had received financial education at school. Compared with other countries, socio‐economic factors explained the smallest proportion of variance in the test score. There was, however, a significant difference between the mean financial literacy scores of Estonian‐ and Russian‐language communities. The aim of the article is to analyse the factors behind the differences in financial literacy when financial education is not provided. It also offers insight into how students in a similar education system in two different cultural and language frameworks achieve different financial literacy scores. Moreover, the results demonstrate how indicators, such as family background can work through different channels as opposed to the usual parental education or occupation based socio‐economic indicators. The latter implies that unexplained factors remain, such as cultural, developmental and societal indicators, which most researchers pay little attention to when explaining efficient policies for improving financial literacy. Multivariate regression models show that the level of financial literacy in Estonia is correlated with gender, language of the school, the number of books at home, mathematics and reading scores. The Blinder–Oaxaca decomposition explains less than half of the gap between the two communities. The only variable significantly explaining the gap is the number of books at home. Books can be interpreted as a symbol of social status, evidence of cultural background or source of influence for broader picture and better problem solving skills.     

Financial literacy in the digital age—A research agenda

Digital innovations are transforming financial services and resulting changes in consumer behavior and personal money management. Diffusion of pervasive digital technologies offers individuals quick and easy access to various digital services bringing opportunities and challenges into their personal money management. The study aimed to explore how digitalization affects individuals' financial literacy and financial capability. As a result, we identified three main themes in the intersection of finance and digitalization: Fintech, Financial behavior in digital environments, and Behavioral interventions. We propose directions for measuring digital financial literacy, updates to the financial literacy curriculum, and developments of digital learning tools. Further, we highlight collaboration between the public and private sectors to create a fairer and more inclusive economic landscape. Our study contributes to existing research by proposing a framework for digital financial literacy and financial capability and a research agenda for future studies.     

Consumer bankruptcy in Utah (USA): who files and why?

This study examined consumer debtors who filed for bankruptcy and their reasons for filing in Utah, the U.S. state that ranked first in household filing rate in 2002–2004 and consistently ranks in the top ten of the 50 states. The purpose of the study was to determine the demographic characteristics of debtors and reasons for filing. Data were collected during 2004–2005 via survey from 508 debtors. The debtors reported employment problems, medical expenses, divorce or other family problems, as well as trouble managing their finances and overuse of credit cards. More than half of the debtors owed medical providers. Debtors were more likely to report a reduction in income than job loss. Self‐employed persons were over represented. Respondent debtors are less educated, less likely to be married and less likely to own a home compared with Utahns and other Americans. Contrary to expectations, debtor households were smaller than the state average, which may be due to the young age of debtors. Results suggest that in order to reduce the bankruptcy rate in Utah, consumer educators should target renters, adults with less than a college education, divorcing persons and small business owners. Utah's mandate for a personal finance graduation requirement should be implemented early in the secondary school curriculum.     

Student Cultural Interaction in a Short-Term Study Abroad Program

Empirical studies of the effects of short-term study abroad programs have found mixed results. This study uses a pre-post test design to assess the effect on student cross-cultural adaptability of a 2-week study abroad program to Germany that includes substantial student interaction with Germans. Pretrip to post-trip, students showed a significant increase in personal autonomy. Comparison of pretrip student scores against scale score means identified personal autonomy as the only dimension students were not already significantly above average pretrip. Although Business students demonstrated a significant increase in personal autonomy following the trip, Letters and Sciences students showed no significant change in any of the four cultural dimensions measured.     

Developing and Measuring the Impact of an Accounting Ethics Course that is Based on the Moral Philosophy of Adam Smith

Accounting ethics failures have seized headlines and cost investors billions of dollars. Improvement of the ethical reasoning and behavior of accountants has become a key concern for the accounting profession and for higher education in accounting. Researchers have asked a number of questions, including what type of accounting ethics education intervention would be most effective for accounting students. Some researchers have proposed virtue ethics as an appropriate moral framework for accounting. This research tested whether Smithian virtue ethics training, based on Adam Smith’s “The Theory of Moral Sentiments” (1790/1976), is effective in improving accounting student’s cognitive moral development (CMD). This research used a pre-test, treatment, post-test, quasi-experimental design utilizing the Defining Issues Test 2 (DIT-2) instrument to measure students’ CMD. Analysis of DIT-2 gain scores did show a significant improvement in subjects’ personal interest scores and a significant improvement in an overall measure of CMD, the DIT N2 index, whereas their DIT-2 post-conventional scores did not improve significantly. This research supports the proposition that the concepts contained in Smithian virtue ethics can contribute to an effective accounting ethics education intervention. However, further research is required to determine what concepts should be included to improve accounting students’ post-conventional moral reasoning.     

International Group Heterogeneity and Students’ Business Project Achievement

In business higher education, group project work plays an essential role. The purpose of the present study is to explore the relationship between the group heterogeneity of students’ business project groups and their academic achievements at both group and individual levels. The sample consists of 536 freshmen from an International Business School in a Dutch University. The research has revealed that students’ academic performances are positively correlated with their achievement in group projects at both individual and group levels. However, the group ethnic heterogeneity is negatively related with students’ project scores. The findings may enable education practitioners to gain more insights into students’ project work and manage students’ group work more effectively.     

What’s in a Score? Differences in Consumers’ Credit Knowledge Using OLS and Quantile Regressions

Credit literacy depends, in part, on understanding credit reports and scores. The U.S. Government Accountability Office conducted a study in 2004 to assess consumers’ knowledge of credit reports, credit scores, and the dispute resolution process. This study uses the Government Accountability Office data and estimates a series of ordinary least squares and quantile regressions to identify specific subgroups of the population that could benefit from more targeted consumer policies and financial education. The findings from this research have important implications for consumer educators, financial professionals, and policy makers, especially with respect to national strategies designed to improve consumers’ financial well‐being.     

Catch me if I fall: Cross-national differences in willingness to take financial risks as a function of social and state ‘cushioning’

Knowledge about the existence and source of national differences in willingness to take risks plays a vital role in ensuring successful communication, collaboration, and understanding across countries, from the personal to the organizational and political/social domain. The current study investigates differences in financial risk-taking willingness between countries as a function of social and state ‘cushioning’, i.e. the extent of a person’s social support network and the state’s social-safety support network. The study compares large-scale household data and self-reports on willingness to take financial risks across three countries differing in their state support networks: Austria, Italy and the United States. Results show that personal social support network size influences risk-taking willingness (social cushioning). Furthermore, and most notably, we find evidence of an interactive relationship between social and state cushioning. High state cushioning renders the influence of social cushioning on financial risk-taking willingness less important. Contributions to management and business practice as well as theory on the influence of personal distance to financial support on risk-taking willingness are discussed.     

Internationalizing Business Education

ABSTRACT

A research effort was undertaken to study factors that would encourage and limit business school students regarding their participation in international study programs. The sample of students came from a large, urban, state university. Results indicate that personal factors were the strongest encouraging variables while financial considerations were the most limiting factor in the decision process. Subsequently, factors that would promote increased overseas study participation among the students were analyzed.     

Factors that influence the financial literacy of young Spanish consumers

This study examines the development of mathematical and financial literacy skills amongst 471 students in Spain. Most studies on this topic have looked at either one or the other skill but they have not examined the relationship between the two.  The use of simultaneous equations has enabled us to do so. The aim of the paper is to disentangle the factors determining the financial skills of young consumers in Spain. To do this, the PISA Financial Literacy Assessment conducted by the OECD in 2012 is used. Our paper’s main contribution lies in the methodological way to deal with the empirical challenges overshadowing our study. Particularly, our methodological strategy is defined by the application of a multi‐level model of simultaneous equations (MSiEM). This method allows us to take into account the simultaneous determination of math and financial skills at school and the nested structure of the database. This MSiEM permits the identification of the determinants of financial skills, differentiating between the influences operating at school level from those at student level. A first conclusion is that the development of financial abilities of young consumers is mediated by their mathematical skills. A second conclusion, in accordance with those of other international studies, is the importance of the family on the financial literacy of 15‐year‐old Spanish students. The family, a first‐order determinant in reading, science and math scores, is also a key variable in the development of financial skills. Finally, school type (public vs. private) does not display any effect on either the financial or math performance of Spanish young people.