IDEAS home Printed from https://ideas.repec.org/a/pal/gpprii/v49y2024i4d10.1057_s41288-024-00312-5.html
   My bibliography  Save this article

Exploring the link between financial literacy and business interruption insurance: evidence from Italian micro-enterprises

Author

Listed:
  • Ornella Ricci

    (University of Roma Tre)

  • Gianluca Santilli

    (University of Rome Tor Vergata)

Abstract

This article examines the relationship between financial literacy and business interruption (BI) insurance among Italian entrepreneurs. Following an increase in unexpected shocks, such as COVID-19 and geopolitical conflicts, a high level of BI risk is expected to persist, especially among small firms, which play a key role in the Italian economy. Using a Bank of Italy 2021 survey of 1998 non-financial firms with fewer than 10 employees, we show a significant positive association between the level of the entrepreneur’s financial literacy and the purchase of BI insurance. Our results highlight the key role of financial literacy in shaping risk management strategies and are robust to different model specifications, also addressing endogeneity concerns.

Suggested Citation

  • Ornella Ricci & Gianluca Santilli, 2024. "Exploring the link between financial literacy and business interruption insurance: evidence from Italian micro-enterprises," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(4), pages 663-681, October.
  • Handle: RePEc:pal:gpprii:v:49:y:2024:i:4:d:10.1057_s41288-024-00312-5
    DOI: 10.1057/s41288-024-00312-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41288-024-00312-5
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1057/s41288-024-00312-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:eme:mfppss:mf-06-2021-0260 is not listed on IDEAS
    2. van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob, 2011. "Financial literacy and stock market participation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 449-472, August.
    3. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    4. Alejandro Drexler & Greg Fischer & Antoinette Schoar, 2014. "Keeping It Simple: Financial Literacy and Rules of Thumb," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 1-31, April.
    5. Rob Alessie & Maarten van Rooij & Annamaria Lusardi, 2011. "Financial Literacy, Retirement Preparation and Pension Expectations in the Netherlands," CeRP Working Papers 110, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    6. Antonio Molina-García & Julio Diéguez-Soto & M. Teresa Galache-Laza & Marta Campos-Valenzuela, 2023. "Financial literacy in SMEs: a bibliometric analysis and a systematic literature review of an emerging research field," Review of Managerial Science, Springer, vol. 17(3), pages 787-826, April.
    7. Maarten C.J. van Rooij & Annamaria Lusardi & Rob J.M. Alessie, 2012. "Financial Literacy, Retirement Planning and Household Wealth," Economic Journal, Royal Economic Society, vol. 122(560), pages 449-478, May.
    8. Rob Alessie & Maarten van Rooij & Annamaria Lusardi, 2011. "Financial Literacy, Retirement Preparation and Pension Expectations in the Netherlands," CeRP Working Papers 110, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    9. Zou, Hong & Adams, Mike B., 2006. "The corporate purchase of property insurance: Chinese evidence," Journal of Financial Intermediation, Elsevier, vol. 15(2), pages 165-196, April.
    10. repec:ecj:econjl:v:122:y:2012:i::p:449-478 is not listed on IDEAS
    11. Rajdeep Kumar Raut, 2020. "Past behaviour, financial literacy and investment decision-making process of individual investors," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 15(6), pages 1243-1263, April.
    12. Alessie, Rob & Van Rooij, Maarten & Lusardi, Annamaria, 2011. "Financial literacy and retirement preparation in the Netherlands," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 527-545, October.
    13. Giovanni D'Alessio & Riccardo De Bonis & Andrea Neri & Cristiana Rampazzi, 2021. "Financial literacy in Italy: The results of the Bank of Italy’s 2020 survey," Politica economica, Società editrice il Mulino, issue 2, pages 215-252.
    14. Helmut Gründl & Danjela Guxha & Anastasia Kartasheva & Hato Schmeiser, 2021. "Insurability of pandemic risks," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(4), pages 863-902, December.
    15. Laureen Regan & Yeon Hur, 2007. "On the Corporate Demand for Insurance: The Case of Korean Nonfinancial Firms," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 74(4), pages 829-850, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lusardi, Annamaria & Kaiser, Tim, 2024. "Financial literacy and financial education: An overview," CEPR Discussion Papers 19185, C.E.P.R. Discussion Papers.
    2. Sconti, Alessia, 2022. "Digital vs. in-person financial education: What works best for Generation Z?," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 300-318.
    3. Shen, Chung-Hua & Lin, Shih-Jie & Tang, De-Piao & Hsiao, Yu-Jen, 2016. "The relationship between financial disputes and financial literacy," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 46-65.
    4. Riccardo Calcagno & Paolo Finaldi Russo & Ludovica Galotto & Anita Quas, 2024. "Financial literacy of micro-entrepreneurs and access to credit," Questioni di Economia e Finanza (Occasional Papers) 853, Bank of Italy, Economic Research and International Relations Area.
    5. Kadoya, Yoshihiko & Khan, Mostafa Saidur Rahim, 2020. "What determines financial literacy in Japan?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(3), pages 353-371, July.
    6. Albert Hizgilov & Jacques Silber, 2020. "On Multidimensional Approaches to Financial Literacy Measurement," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(3), pages 787-830, April.
    7. Tabea Bucher-Koenen & Rob Alessie & Annamaria Lusardi & Maarten van Rooij, 2021. "Fearless Woman. Financial Literacy and Stock Market Participation," Working Papers 708, DNB.
    8. Tabea Bucher-Koenen & Annamaria Lusardi & Rob Alessie & Maarten van Rooij, 2017. "How Financially Literate Are Women? An Overview and New Insights," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(2), pages 255-283, July.
    9. Zhou, Yang & Yang, Manfang & Gan, Xu, 2023. "Education and financial literacy: Evidence from compulsory schooling law in China," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 335-346.
    10. David Aristei & Manuela Gallo, 2021. "Financial Knowledge, Confidence, and Sustainable Financial Behavior," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
    11. Zuzana Brokesova & Andrej Cupak & Gueorgui Kolev, 2017. "Financial literacy and voluntary savings for retirement in Slovakia," Working and Discussion Papers WP 10/2017, Research Department, National Bank of Slovakia.
    12. repec:fst:rfsisf:v:8:y:2023:i:special-june_2023:p:129-150 is not listed on IDEAS
    13. Angelo Baglioni & Luca Colombo & Giulio Piccirilli, 2018. "On the Anatomy of Financial Literacy in Italy," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 47(2-3), pages 245-304, July.
    14. Alessandro Bucciol & Martina Manfre' & Marcella Veronesi, 2018. "The Role of Financial Literacy and Money Education on Wealth Decisions," Working Papers 05/2018, University of Verona, Department of Economics.
    15. Marie-Hélène BROIHANNE, 2021. "Testing the gender gap in subjective financial literacy of spouses," Working Papers of LaRGE Research Center 2021-08, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    16. Lin, Chaonan & Hsiao, Yu-Jen & Yeh, Cheng-Yung, 2017. "Financial literacy, financial advisors, and information sources on demand for life insurance," Pacific-Basin Finance Journal, Elsevier, vol. 43(C), pages 218-237.
    17. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan & Tomomi Hamada & Alvaro Dominguez, 2018. "Financial literacy and anxiety about life in old age: evidence from the USA," Review of Economics of the Household, Springer, vol. 16(3), pages 859-878, September.
    18. Dolores Moreno-Herrero & Manuel Salas-Velasco & José Sánchez-Campillo, 2017. "Individual Pension Plans in Spain: How Expected Change in Future Income and Liquidity Constraints Shape the Behavior of Households," Journal of Family and Economic Issues, Springer, vol. 38(4), pages 596-613, December.
    19. Ancuța Lucaci & Carmen Năstase, 2023. "Financial literacy and employment: an overview and bibliometric analysis," Journal of Financial Studies, Institute of Financial Studies, vol. 14(8), pages 129-150, June.
    20. Kamer Karakurum-Ozdemir & Melike Kokkizil & Gokce Uysal, 2019. "Financial Literacy in Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 325-353, May.
    21. Noviarini, Jelita & Coleman, Andrew & Roberts, Helen & Whiting, Rosalind H., 2023. "Financial literacy and retirees' resource allocation decisions in New Zealand," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:gpprii:v:49:y:2024:i:4:d:10.1057_s41288-024-00312-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.