IDEAS home Printed from https://ideas.repec.org/a/taf/ujbmxx/v60y2022i2p289-308.html
   My bibliography  Save this article

Financial literacy and entrepreneurial risk aversion

Author

Listed:
  • Jan Riepe
  • Michelle Rudeloff
  • Theresa Veer

Abstract

We explore the interaction effects of financial literacy and risk aversion on becoming an entrepreneur. We use two independent datasets to provide evidence that the difference in risk aversion between entrepreneurs and wage earners is conditional on their financial literacy. First, we use the De Nederlandsche Bank’s Household Survey and find lower risk aversion only for entrepreneurs with lower financial literacy. The difference disappears for entrepreneurs with higher financial literacy. Second, we show that the results are robust in a fully incentivized field experiment with high-tech startups from three European countries. The results reveal a potential channel of how financial literacy can promote entrepreneurship.

Suggested Citation

  • Jan Riepe & Michelle Rudeloff & Theresa Veer, 2022. "Financial literacy and entrepreneurial risk aversion," Journal of Small Business Management, Taylor & Francis Journals, vol. 60(2), pages 289-308, March.
    • Handle: RePEc:taf:ujbmxx:v:60:y:2022:i:2:p:289-308
    DOI: 10.1080/00472778.2019.1709380
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00472778.2019.1709380
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00472778.2019.1709380?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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guangshun Xu & Lin Feng & Wenzheng Wang & Qiaohui Liang, 2024. "Digital Financial Literacy and Rural Income Inequality," SAGE Open, , vol. 14(3), pages 21582440241, September.
    2. Andriy Tsapin & Oleksandr Faryna, 2024. "The Role of Financial Literacy in Anchoring Inflation Expectations: The Case of Ukraine," Working Papers 02/2024, National Bank of Ukraine.
    3. Erich Renz & Marvin M. Müller & Kim Leonardo Böhm, 2023. "When nudges promote neutral behavior: an experimental study of managerial decisions under risk and uncertainty," Journal of Business Economics, Springer, vol. 93(8), pages 1309-1354, October.
    4. Antonio Duréndez & Julio Dieguez-Soto & Antonia Madrid-Guijarro, 2023. "The influence of CEO’s financial literacy on SMEs technological innovation: the mediating effects of MCS and risk-taking," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-26, December.
    5. Aristei, David & Gallo, Manuela & Vannoni, Valeria, 2024. "Preferences for ethical intermediaries and sustainable investment decisions in micro-firms: The role of financial literacy and digital financial capability," Research in International Business and Finance, Elsevier, vol. 71(C).

    More about this item

    Statistics

    Access and download statistics

    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:taf:ujbmxx:v:60:y:2022:i:2:p:289-308. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ujbm .

    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.