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The Mediating Effect of Financial Literacy on Blockchain Technology Application and Financial Risk: Insight from Ghanaian Professionals towards Policy Recommendations

Author

Listed:
  • Maxwell Mensah Okpoti

    (PhD Student, Valley View University, Accra, Ghana)

  • Williams Kwasi Peprah

    (Department of Accounting, Economics and Finance, School of Business Administration, Andrews University, Michigan, USA)

Abstract

This study explores the mediating effect of financial literacy on the relationship between blockchain technology application and financial risk among financial institution professionals in Ghana. Utilizing a correlational research design, data were collected from a sample of 336 professionals through a self-constructed Likert-scale questionnaire. The analysis was conducted using path analysis and mediation techniques. The findings reveal that financial literacy had a  significant partial mediating effect between blockchain technology application and financial risk, accounting for 26.0% of the total effect. The direct negative effect of blockchain technology applications on financial risk also remained significant, highlighting the independent contribution of blockchain technology applications to reducing financial risk. These results underscore the importance of financial literacy in enhancing the effectiveness of blockchain technology applications in mitigating financial risks. The study emphasizes the need for comprehensive financial literacy programs to maximize the benefits of technological advancements in the financial sector. Empirical evidence from related literature supports the findings, indicating that higher financial literacy enables better utilization of blockchain technology applications, thereby reducing financial risk. The research provides insights for policymakers aiming to improve financial literacy and leverage blockchain technology applications for financial risk management.

Suggested Citation

  • Maxwell Mensah Okpoti & Williams Kwasi Peprah, 2024. "The Mediating Effect of Financial Literacy on Blockchain Technology Application and Financial Risk: Insight from Ghanaian Professionals towards Policy Recommendations," International Journal of Economics and Financial Issues, Econjournals, vol. 14(6), pages 239-249, October.
    • Handle: RePEc:eco:journ1:2024-06-26
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    References listed on IDEAS

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    More about this item

    Keywords

    Blockchain Technology Application; Financial Literacy; Financial Risk; Mediation Analysis; Financial Institutions;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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