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Financial literacy, self-efficacy and risky credit behavior among college students: Evidence from online consumer credit

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  • Liu, Liu
  • Zhang, Hua

Abstract

The issue of online consumer credit for college students has attracted academic attention, but the interaction mechanism between financial literacy and risky credit behavior is not fully understood. Based on the theory of financial literacy and self-efficacy, this study investigates the underlying mediating mechanisms and contextual conditions in the relationship between college students’ financial literacy and risky credit behavior, using data from 539 college students in the Pearl River Delta of China. The results indicate that the financial literacy of these students has a significantly negative impact on their risky credit behavior, and that subjective financial literacy has a greater effect than objective financial literacy. We also find that the relationship between financial literacy and risky credit behavior is intensified when college students’ levels of finance-related stress are high. Our work demonstrates that financial self-efficacy partially mediates the relationship between financial literacy and risky credit behavior. This study contributes to financial literacy literature by identifying the interplay of financial self-efficacy, individual financial literacy, and consumer credit behavior.

Suggested Citation

  • Liu, Liu & Zhang, Hua, 2021. "Financial literacy, self-efficacy and risky credit behavior among college students: Evidence from online consumer credit," Journal of Behavioral and Experimental Finance, Elsevier, vol. 32(C).
    • Handle: RePEc:eee:beexfi:v:32:y:2021:i:c:s2214635021001131
    DOI: 10.1016/j.jbef.2021.100569
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    Cited by:

    1. Pengpeng Yue & Aslihan Gizem Korkmaz & Zhichao Yin & Haigang Zhou, 2022. "The rise of digital finance: Financial inclusion or debt trap," Papers 2201.09221, arXiv.org.
    2. Ortiz, Jose M. & Teixeira, Lucas I. & Falcão, Natália N.L. & Soki, Erika A. & Almeida, Raquel M., 2024. "Information simplification and default choices improve financial decisions: A credit card statement experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).
    3. Yue, Pengpeng & Korkmaz, Aslihan Gizem & Yin, Zhichao & Zhou, Haigang, 2022. "The rise of digital finance: Financial inclusion or debt trap?," Finance Research Letters, Elsevier, vol. 47(PA).
    4. Foguesatto, Cristian Rogério & Righi, Marcelo Brutti & Müller, Fernanda Maria, 2024. "Is there a dark side to financial inclusion? Understanding the relationship between financial inclusion and market risk," The North American Journal of Economics and Finance, Elsevier, vol. 72(C).
    5. Noh, Mijeong, 2022. "Effect of parental financial teaching on college students’ financial attitude and behavior: The mediating role of self-esteem," Journal of Business Research, Elsevier, vol. 143(C), pages 298-304.
    6. Pak, Tae-Young, 2023. "Relative deprivation and financial risk taking✰," Finance Research Letters, Elsevier, vol. 55(PA).

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