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Impact of financial literacy on savings behavior: the moderation role of risk aversion and financial confidence

Author

Listed:
  • S. Ananda

    (Research and Innovation Department, College of Banking and Financial Studies)

  • Raghavendra Prasanna Kumar

    (CHRIST (Deemed to Be University))

  • Tamanna Dalwai

    (Nottingham Trent University)

Abstract

This research examines the impact of financial literacy on the savings behavior of investors residing in the Gulf Cooperation Council (GCC) region. It also investigates the moderating impact of financial confidence and risk aversion in the relationship between financial literacy and savings behavior. The primary data were collected from 357 respondents through a structured questionnaire using the snowball sampling method. The findings of this study suggest that financial literacy has a positive impact on investors' savings behavior. Further, the study also found that risk aversion significantly moderates the relationship between financial literacy and savings behavior. The three-way interaction between financial literacy, risk aversion, and financial confidence significantly affects the investors’ savings behavior. The study suggests that policymakers should emphasize training programs for investors on financial literacy, financial confidence, and risk aversion.

Suggested Citation

  • S. Ananda & Raghavendra Prasanna Kumar & Tamanna Dalwai, 2024. "Impact of financial literacy on savings behavior: the moderation role of risk aversion and financial confidence," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 843-854, September.
    • Handle: RePEc:pal:jofsma:v:29:y:2024:i:3:d:10.1057_s41264-023-00265-1
    DOI: 10.1057/s41264-023-00265-1
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