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The Impact of Financial Literacy on Rural Household Self-Employment: The Mediating Role of Financial Ability

Author

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  • Dongni Chang
  • Wanming Chen
  • Xiujun Tai
  • Yanwu Si

Abstract

Focusing on rural household self-employment, this paper analyzes the relation between financial literacy and self-employment in China. More importantly, it tests the mediating role of farmers’ financial ability regarding asset proliferation and borrowing capacity in this relationship. We draw the following conclusions. First, financial literacy has a significant positive impact on the self-employment of poor rural households. Second, financial ability plays an intermediary role in the relation between financial literacy and self-employment. Third, the borrowing ability of rural households has a strong intermediary effect on the relation between objective financial literacy and self-employment.

Suggested Citation

  • Dongni Chang & Wanming Chen & Xiujun Tai & Yanwu Si, 2022. "The Impact of Financial Literacy on Rural Household Self-Employment: The Mediating Role of Financial Ability," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(11), pages 3297-3308, September.
    • Handle: RePEc:mes:emfitr:v:58:y:2022:i:11:p:3297-3308
    DOI: 10.1080/1540496X.2022.2043152
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    Cited by:

    1. Silin Liu & Jia He & Dingde Xu, 2023. "Understanding the Relationship between Financial Literacy and Chinese Rural Households’ Entrepreneurship from the Perspective of Credit Constraints and Risk Preference," IJERPH, MDPI, vol. 20(6), pages 1-15, March.
    2. Chang’an Liang & Guoming Du & Zhaoda Cui & Bonoua Faye, 2022. "Does Digital Inclusive Finance Enhance the Creation of County Enterprises? Taking Henan Province as a Case Study," Sustainability, MDPI, vol. 14(21), pages 1-17, November.

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