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The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana

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  • Samuel Adomako
  • Albert Danso
  • John Ofori Damoah

Abstract

The literature on access to finance has confirmed a positive relationship between access to finance and firm growth. Yet the boundary conditions for such linkage are less examined in the context of developing economies. This study draws on resource-based view to introduce financial literacy as a moderator of the relationship between access to finance and firm growth. This theoretically derived research model is empirically tested using survey data from 201 small and medium-sized enterprises in Ghana. Our empirical findings suggest that financial literacy positively enhances the access to finance-firm growth relationship.

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  • Samuel Adomako & Albert Danso & John Ofori Damoah, 2016. "The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana," Venture Capital, Taylor & Francis Journals, vol. 18(1), pages 43-61, January.
    • Handle: RePEc:taf:veecee:v:18:y:2016:i:1:p:43-61
    DOI: 10.1080/13691066.2015.1079952
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    1. Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, March.
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    Cited by:

    1. Olayinka David-West & Oluwasola Oni & Folajimi Ashiru, 2022. "Diffusion of Innovations: Mobile Money Utility and Financial Inclusion in Nigeria. Insights from Agents and Unbanked Poor End Users," Information Systems Frontiers, Springer, vol. 24(6), pages 1753-1773, December.
    2. Iman Cheratian & Saleh Goltabar & Hassan Gholipour Fereidouni & Mohammad Reza Farzanegan, 2023. "External Financing and Firm Growth: Evidence from Micro, Small, and Medium Enterprises in Iran," MAGKS Papers on Economics 202308, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Weidong Chen & Xiaohui Yuan, 2021. "Financial inclusion in China: an overview," Frontiers of Business Research in China, Springer, vol. 15(1), pages 1-21, December.
    4. Musah, Alhassan & Yakubu, Ibrahim Nandom & Abagna, Matthew Amalitinga, 2022. "Financial Literacy: A Peep into the Literature and Note for Policy," MPRA Paper 115703, University Library of Munich, Germany.
    5. 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.
    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. García-Pérez-de-Lema, Domingo & Ruiz-Palomo, Daniel & Diéguez-Soto, Julio, 2021. "Analysing the roles of CEO's financial literacy and financial constraints on Spanish SMEs technological innovation," Technology in Society, Elsevier, vol. 64(C).
    8. Shahid Manzoor Shah & Amjad Ali, 2022. "A Survey on Financial Inclusion: Theoretical and Empirical Literature Review," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 310-330, December.
    9. Anh Tuan Bui & Thu Phuong Pham, 2021. "Financial and Labour Obstacles and Firm Employment: Evidence from Europe and Central Asia Firms," Sustainability, MDPI, vol. 13(15), pages 1-18, August.
    10. Qianwei Ying & Hazrat Hassan & Habib Ahmad, 2019. "The Role of a Manager’s Intangible Capabilities in Resource Acquisition and Sustainable Competitive Performance," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    11. Ozili, Peterson K, 2020. "Financial inclusion research around the world: a review," MPRA Paper 101809, University Library of Munich, Germany.
    12. Obi Berko Obeng Damoah & Augustine Awuah Peprah, 2021. "Synthesis of small and medium enterprise research in Ghana," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 451-468, December.
    13. Samsidine Aidara & Abdullah Al Mamun & Noorul Azwin Md Nasir & Muhammad Mohiuddin & Noorshella Che Nawi & Noor Raihani Zainol, 2021. "Competitive Advantages of the Relationship between Entrepreneurial Competencies and Economic Sustainability Performance," Sustainability, MDPI, vol. 13(2), pages 1-19, January.
    14. Isidore, Renu & Arun, C. Joe, 2023. "The Moderating Effect of Financial Literacy on the Relationship Between Decision-Making Tools and Equity Returns in the Indian Secondary Equity Market," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 15(1), pages 185-211, January.
    15. Jianmu Ye & KMMCB Kulathunga, 2019. "How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective," Sustainability, MDPI, vol. 11(10), pages 1-21, May.
    16. Rizwan Ullah Khan & Yashar Salamzadeh & Hiroko Kawamorita & Gabor Rethi, 2021. "Entrepreneurial Orientation and Small and Medium-sized Enterprises’ Performance; Does ‘Access to Finance’ Moderate the Relation in Emerging Economies?," Vision, , vol. 25(1), pages 88-102, March.
    17. Cheratian, Iman & Goltabar, Saleh & Gholipour, Hassan F. & Farzanegan, Mohammad Reza, 2024. "Finance and sales growth at the firms level in Iran: Does type of spending matter?," Research in International Business and Finance, Elsevier, vol. 67(PB).
    18. Salia, Samuel & Hussain, Javed & Tingbani, Ishmael & Kolade, Oluwaseun, 2017. "Is women empowerment a zero Sum game? Unintended Consequences of microfinance for Women’s empowerment in Ghana," MPRA Paper 82895, University Library of Munich, Germany, revised 23 Aug 2017.
    19. Daniel Agyapong & Albert Bampo Attram, 2019. "Effect of owner-manager’s financial literacy on the performance of SMEs in the Cape Coast Metropolis in Ghana," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-13, December.
    20. Md. Saidul Islam & Md. Akash & Shake Farhan & Md Jahidul Islam Jahid & Md.Omit Hasan Ovi, 2023. "Understanding the Factors that Influence Financial Literacy in Small Businesses: Evidence from Bangladesh," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(12), pages 492-505, December.
    21. Sarfaraz Javed & Uvesh Husain, 2021. "Corporate CSR practices and corporate performance: managerial implications for sustainable development," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 48(2), pages 153-164, June.
    22. Tadios Munodawafa & Micheline Naude & Krishna K. Govender, 2024. "Assuring the Sustainability and Growth of Small and Medium-Sized Manufacturing Enterprises in Botswana: An Exploratory Study," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 253-266, July.
    23. Shahid Latif & Safrul Izani Mohd Salleh & Mazuri Abd. Ghani & Bilal Ahmad, 2023. "Developing Management Accounting Systems as a Change Process for Economic Sustainability: A Case of Sportswear Manufacturing SME," South Asian Journal of Business and Management Cases, , vol. 12(2), pages 207-221, August.

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