The effects of financial literacy on the borrowing behaviour of Turkish financial consumers

Our research attempts to measure the effects of financial literacy of Turkish financial consumers on the borrowing behaviour. A questionnaire is administered to a sample of 550 people in the city of Eskisehir. In‐depth interviews are undertaken with 10 financial consumers to support the findings. Findings of the study indicate differences in the borrowing behaviour of consumers with different levels of financial literacy. Considering the relationship between financial literacy and borrowing behaviour, we suggest that attempts to increase financial literacy of financial consumers may have important implications in the prevention of excessive borrowing.     

Healthy financial habits in young adults: An exploratory study of the relationship between subjective financial literacy,engagement with finances,and financial decision-making

This paper provides insights into young adults' financial habits and decision-making considerations as they enter the workforce. We use 28 semi-structured interviews with Australian university graduates to explore how their motivation to engage with personal finances and their subjective financial literacy, i.e., self-reported, support healthy financial habits. Our findings show that a young adult's social context and exposure to financial hardship rather than their financial confidence determine the health of their financial habits. We observed research participants in a romantic partnership as more focused on their future. This future focus motivates them to engage more with their finances and manifests as explicit goal setting, formal budgeting, or adherence to strict bucket systems. These insights might be useful for policymakers and educators: social context matters when designing financial health interventions, while financial education programs predominately should aim at demystifying complex long-term financial decision-making such as investments and retirement.     

Traffic safety behaviour among young people in different residential settings: the use of seat belts,bicycle helmets,and reflectors by young people in Sweden

This study examines if, and how, the size of the community in which people live may contribute to explaining differences in traffic safety behaviour (self-reported behaviour regarding the use of seat belts, bicycle helmets and reflectors) among young people in Sweden. The study is based on a Swedish nationwide traffic safety survey with a net sample of 2854 respondents aged 16–25. Ordered logit regressions were performed, and place of residence is shown to have an impact on traffic safety behaviour. The results are presented and discussed in relation to risk exposure and traffic safety facilities in different settings. The implications of the study are considered, and the importance of investigating the way in which young people see traffic safety behaviour is emphasised.     

Impact of family income in early life on the financial independence of young adults: Evidence from a matched panel data

This study investigates whether the family income level in early life influences the financial independence of young adults. Using a large nationally representative U.S. sample (constructed based on the data from the 1999 to 2015 Panel Study of Income Dynamics, its 2009 to 2015 Transition to Adulthood Supplement and its 1997 to 2007 Child Development Supplement), we find that the relationship between one's family income level during adolescence and the financial independence of young adults follows an inverted U‐shape. We find that the college graduation status plays an important role in determining the financial independence of young adults. Once young adults graduate from the college, their financial independence is no longer influenced by their family income level during adolescence. The results show similar patterns after controlling for cognitive and noncognitive abilities and financial behaviours of young adults when they were children or teenagers. The findings of this study have significant implications for policymakers and educators.     

Ageing and consumption in Finland: The effect of age and life course stage on ecological,economical and self‐indulgent consumption among late middle‐agers and young adults between 1999 and 2014

Previous studies on ageing consumers have mainly focused on chronological age and generational values or studied ageing and consumption with cross‐sectional data. Few quantitative studies exist that examine the effect of age together with life course on consumption using longitudinal data. To bridge this gap, the article examines ageing and attitudes towards consumption in Finland, focusing particularly on late middle‐agers (46–60 year‐olds) in comparison with young adults (18–30 year‐olds) between 1999 and 2014. The article explores three consumption patterns based on attitudinal statements: ecological, economical and self‐indulgent consumption. Through analysis of a nationally representative survey study in Finland (N = 8,543), the article reveals that in all years under examination, late middle‐agers reported more ecological attitudes towards consumption than young adults. In 1999 and 2004, the attitudes of late middle‐agers appeared more economical, but age‐related differences in economical attitudes disappeared between 2009 and 2014. In each year, late middle‐agers reported less self‐indulgent attitudes than young adults, and these age‐related differences did not remarkably change between 1999 and 2014. The results indicate that in 1999 and 2004, ecological and economical attitudes towards consumption were best predicted by age at the year of the study. In later years, ecological attitudes were more closely determined by life course stage, that is household type and other socio‐demographic determinants. Regarding economical attitudes, generational or cohort effects were pronounced among late middle‐agers in 1999. In contrast, the significance of age remained throughout the years for self‐indulgent attitudes, indicating the absence of generational or cohort effects.     

Young adults’ borrowing to purchases of desired consumer products related to present‐biased temporal discounting,attitude towards borrowing and financial involvement and knowledge

The aim is to investigate how present‐biased temporal discounting caused by feelings of financial deficit, attitude towards borrowing and financial involvement and knowledge determine young adults’ likelihood of borrowing to purchases of desired consumer products. A sample of 273 young adults aged 18–30 years answered an online questionnaire including experimental treatments to induce present‐biased temporal discounting, followed by questions about attitude towards borrowing, financial involvement/knowledge and financial resources. In different treatment conditions, participants rated the likelihood of borrowing to purchases of desired consumer products at prices judged to be unaffordable or to replace purchases of equally expensive products in the future but not immediately. In a control condition, participants rated the likelihood of borrowing to an equally expensive, already purchased product to be paid immediately. A higher likelihood of borrowing to purchases of the desired and already purchased unpaid products was observed, but the difference to the needed products was not statistically significant. Likelihood of borrowing was strongly suppressed by a negative attitude, in all between‐group conditions equally influenced by self‐assessed financial resources but unaffected by financial involvement/knowledge. Both financial involvement/knowledge and a negative attitude decreased choices of months of instalment payments with the consequence that the monthly repayment cost increased.     

Influences on the behaviour of black and minority ethnic (BME) communities towards debt and bankruptcy

This article sets out to examine the attitudes towards debt, bankruptcy and the bankruptcy process of black and minority ethnic (BME) entrepreneurs and individuals who are experiencing bankruptcy; and to assess the extent to which their attitudes towards debt and bankruptcy have been influenced by various external factors, including their cultural and religious practices. The paper uses a qualitative methodology that involves in‐depth, semi‐structured interviews and direct observation, where possible. The findings suggest that in many ethnic minority communities, there are strong cultural and religious imperatives to settle debts, and this can lead to a strong desire to resist at all costs the bankruptcy process. The main finding of this study is that there is a high level of ignorance and a lack of understanding of the actions that can be taken when they find themselves in financial difficulties. The main implication of this study is that education, which fosters financial literacy and pre‐bankruptcy counselling, can empower consumers and enhance responsible financial decision making. There is very little research work in this area, and the paper is based on qualitative research that captures for the first time why the attitudes and behaviour of BME groups towards debt and bankruptcy differ from those of the white population.     

Internationalization strategy,financial constraints and assets (in)tangibility. A study of euro area countries after the 2008 crisis

This paper studies the determinants of companies’ performance during the crisis based on their short-term (sales changes) and medium-term (exit) reaction, using firms’ data from the European Firms in Global Economy (EFIGE) survey and combining them with balance-sheet statistics. The results, based on the four largest euro area countries show that vulnerability to the crisis depended on a company’s mode of international operation. More sophisticated forms of internationalization increased firms’ resilience in the first and second waves of the crisis. The paper also investigates the mediating role of intangible assets and financial constraints in the relationship between internationalization and companies’ response to the crisis. While intangible assets were very important for preventing a drop in sales for internationalized firms immediately after 2008, they amplified the probability of firms’ exit five years after the crisis in weaker European countries (Spain and Italy). At the same time, financial constraints increased companies’ probability of exit. Innovation prevented a drop in firms’ sales and firms’ exit.     

The influence of information communications technology (ICT) on cash management and financial department performance: An explanatory model

We delineated the extent to which various facets of information communications technology (ICT) are used and are perceived as useful by treasury managers, focusing on three indicators of financial department performance: cost savings, improvements in the quality of the information, and enhancements in the use of scenario simulations for decision making. Specifically, we examined the relationship between ICT use in cash management functions within financial departments, perceptions of the importance of cash management to treasury managers, and their perceptions of the usefulness of ICT to financial department performance. The theoretical and applied implications of these findings are discussed. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States

Entrepreneurship contributes to business dynamics in all economies, and the individual benefits of starting a business are clear. Nonetheless, access to business start-ups may not be available to all people because of resource constraints. Using a unique new data set for the United States, we examine the relative importance of three forms of resources in pursuing start-up ventures: financial, human, and cultural capital. Our analysis of the Panel Study of Entrepreneurial Dynamics shows that neither financial nor cultural capital resources are necessary conditions for entrepreneurial entry. By contrast, potential entrepreneurs gain significant advantages if they possess high levels of human capital. Specifically, advanced education and managerial experience are significantly positively associated with entrepreneurial entry. Our findings suggest that attempts at entering entrepreneurship, at least in the short-term, may be increasing, as opportunities to acquire human capital are becoming more widespread.     

Interactive effects of information exchange,relationship capital and environmental uncertainty on international joint venture (IJV) performance: An emerging markets perspective

Prior research on the role of international joint ventures (IJV) in the emerging markets generally ignores the impact of information exchange on IJV performance as well as the mediating role of relationship capital (a key measure of competitive dynamics and co-evolution) and the moderating impact of environmental uncertainty in this process. This paper addresses these important research gaps by exploring the direct effect of information exchange on IJV performance as well as indirect (mediated) effect through mutual trust and reciprocal commitment, two key components of relationship capital. In addition, this paper investigates the role of environmental uncertainty as a moderator of these mediating effects. Results from a study of 205 contractual IJVs in China, a highly competitive and dynamic emerging market, show that foreign and local partners collaborate and co-evolve through regular information exchange that helps them build relationship capital with each other in the form of mutual trust and reciprocal commitment, which in turn leads to better IJV performance. In addition, environmental uncertainty negatively moderates (weakens) the positive effects of information exchange on mutual trust and reciprocal commitment but not their impact on IJV performance. The authors discuss the implications of these findings for future research on the role of relationship capital in the successful formation and management of IJVs in the emerging markets.