IDEAS home Printed from https://ideas.repec.org/a/trp/01jefa/jefa0043.html
   My bibliography  Save this article

Social Influence and Saving Behavior among small business owners in Uganda: The mediating role of Financial Literacy

Author

Listed:
  • Eva MPAATA
  • Naomy KOSKEI
  • Ernest SAINA

    (Moi University
    Moi University
    Moi University)

Abstract

The aim of this study was to examine the direct and indirect effect of social influence and financial literacy on saving behavior Explanatory research design and systematic sampling technique was used to collect data with the aid of a questionnaire from a sample size of 430 micro and small enterprise owners in Kampala, Uganda. Reliability test of the research instrument was done by the use of Cronbach alpha. In order to test the hypothesis, and the mediation effect, bootstrapping procedure was followed by testing the direct and indirect effect. The findings show that the connection between social impact and saving behavior is mediated by financial literacy, thus providing new information in research literature on emerging economies where social influence does not encourage saving behavior, hence a need for these economies to adopt financial literacy. Finance scholars have to recognize the central role of financial literacy through financial workshops/seminars, trainings in order to nurture individuals into appropriate saving instruments.

Suggested Citation

  • Eva MPAATA & Naomy KOSKEI & Ernest SAINA, 2021. "Social Influence and Saving Behavior among small business owners in Uganda: The mediating role of Financial Literacy," Journal of Economics and Financial Analysis, Tripal Publishing House, vol. 5(1), pages 17-41.
    • Handle: RePEc:trp:01jefa:jefa0043
    DOI: 10.1991/jefa.v5i1.a39
    as

    Download full text from publisher

    File URL: http://ojs.tripaledu.com/index.php/jefa/article/download/60/72
    Download Restriction: no
    File URL: https://libkey.io/10.1991/jefa.v5i1.a39?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
    ---><---

    References listed on IDEAS

    as
    1. Mustabsar Awais & M. Fahad Laber & Nilofer Rasheed & Aisha Khursheed, 2016. "Impact of Financial Literacy and Investment Experience on Risk Tolerance and Investment Decisions: Empirical Evidence from Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 73-79.
    2. Bandura, Albert, 1990. "Perceived self-efficacy in the exercise of control over AIDS infection," Evaluation and Program Planning, Elsevier, vol. 13(1), pages 9-17, January.
    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. Jonathon N. Cummings, 2004. "Work Groups, Structural Diversity, and Knowledge Sharing in a Global Organization," Management Science, INFORMS, vol. 50(3), pages 352-364, March.
    5. Gerhard, Patrick & Gladstone, Joe J. & Hoffmann, Arvid O.I., 2018. "Psychological characteristics and household savings behavior: The importance of accounting for latent heterogeneity," Journal of Economic Behavior & Organization, Elsevier, vol. 148(C), pages 66-82.
    6. Peter J. Morgan & Long Q. Trinh, 2019. "Determinants and Impacts of Financial Literacy in the Lao PD," Working Papers id:13014, eSocialSciences.
    7. Avdeenko, Alexandra & Bohne, Albrecht & Frölich, Markus, 2019. "Linking savings behavior, confidence and individual feedback: A field experiment in Ethiopia," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 122-151.
    8. Brounen, Dirk & Koedijk, Kees G. & Pownall, Rachel A.J., 2016. "Household financial planning and savings behavior," Journal of International Money and Finance, Elsevier, vol. 69(C), pages 95-107.
    9. Peter J. Morgan & Long Q. Trinh, 2019. "Determinants and Impacts of Financial Literacy in Cambodia and Viet Nam," JRFM, MDPI, vol. 12(1), pages 1-24, January.
    10. Nikolaos Satsios & Spyros Hadjidakis, 2018. "Applying the Theory of Planned Behaviour (TPB) in Saving Behaviour of Pomak Households," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 9(2), pages 122-133, April.
    11. Jean Lown & Jinhee Kim & Michael Gutter & Anne-Therese Hunt, 2015. "Self-efficacy and Savings Among Middle and Low Income Households," Journal of Family and Economic Issues, Springer, vol. 36(4), pages 491-502, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Mohammed Abdullah Ammer & Theyazn H. H. Aldhyani, 2022. "An Investigation into the Determinants of Investment Awareness: Evidence from the Young Saudi Generation," Sustainability, MDPI, vol. 14(20), pages 1-25, October.

    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. Hao Dong & Daniel L. Millimet, 2020. "Propensity Score Weighting with Mismeasured Covariates: An Application to Two Financial Literacy Interventions," JRFM, MDPI, vol. 13(11), pages 1-24, November.
    2. Morshadul Hasan & Thi Le & Ariful Hoque, 2021. "How does financial literacy impact on inclusive finance?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-23, December.
    3. Kass-Hanna, Josephine & Lyons, Angela C. & Liu, Fan, 2022. "Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa," Emerging Markets Review, Elsevier, vol. 51(PA).
    4. Khanh Duy Pham & Vu Linh Toan Le, 2023. "Nexus between Financial Education, Literacy, and Financial Behavior: Insights from Vietnamese Young Generations," Sustainability, MDPI, vol. 15(20), pages 1-21, October.
    5. Morshadul Hasan & Thuhid Noor & Jiechao Gao & Muhammad Usman & Mohammad Zoynul Abedin, 2023. "Rural Consumers’ Financial Literacy and Access to FinTech Services," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 780-804, June.
    6. Morgan, Peter J. & Long, Trinh Quang, 2020. "Financial literacy, financial inclusion, and savings behavior in Laos," Journal of Asian Economics, Elsevier, vol. 68(C).
    7. Yuanyuan Guo & Can Liu & Hao Liu & Ke Chen & Dan He, 2023. "Financial Literacy, Borrowing Behavior and Rural Households’ Income: Evidence from the Collective Forest Area, China," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    8. Yunju Nam & Margaret S. Sherraden & Eun Jeong Lee & Jin Huang, 2022. "Building financial capability among low‐income older Asian immigrants: The roles of financial access and locus of control," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(4), pages 1683-1704, December.
    9. Naseem Al Rahahleh, 2023. "Determinants of the Financial Capability: The Mediating role of Financial Self-efficacy and Financial Inclusion," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 15-29, November.
    10. Nur Alya Afiqah Binti Mahat & Wei-Theng Lau, 2023. "Financial Literacy, Experience, Risk Tolerance and Investment Behavior: Observations during Pandemic," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 558-573, October.
    11. 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.
    12. Kenneth De Beckker & Kristof De Witte & Geert Van Campenhout, 2020. "The role of national culture in financial literacy: Cross‐country evidence," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 912-930, September.
    13. Zaheer Ahmed & Umara Noreen & Suresh A.L. Ramakrishnan & Dewi Fariha Binti Abdullah, 2021. "What explains the investment decision-making behaviour? The role of financial literacy and financial risk tolerance," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 11(1), pages 1-19.
    14. Claude Bernard Lontchi & Baochen Yang & Kabir Musa Shuaib, 2023. "Effect of Financial Technology on SMEs Performance in Cameroon amid COVID-19 Recovery: The Mediating Effect of Financial Literacy," Sustainability, MDPI, vol. 15(3), pages 1-15, January.
    15. Beate Fischer & Gunnar Gutsche & Heike Wetzel, 2020. "Who wants to get involved? Determinants of citizens’ willingness to participate in German renewable energy cooperatives," MAGKS Papers on Economics 202027, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    16. Asad Basheer & Danish Ahmed Siddiqui, 2020. "Explaining the Disposition Bias among Investors: The Mediatory Role of Personality, Financial Literacy, Behavioral Bias and Risk Tolerance," Business and Economic Research, Macrothink Institute, vol. 10(2), pages 290-314, June.
    17. Zhu, Alex Yue Feng, 2019. "Financial risk tolerance of Hong Kong adolescents: A hierarchical model," Children and Youth Services Review, Elsevier, vol. 102(C), pages 193-200.
    18. Naseem Al Rahahleh, 2022. "Financial Literacy Levels among Saudi Citizens across Budgeting, Saving, Investment, Debt, and Insurance Dimensions," JRFM, MDPI, vol. 15(12), pages 1-18, December.
    19. Trinh Quang Long & Peter J. Morgan & Naoyuki Yoshino, 2023. "Financial literacy, behavioral traits, and ePayment adoption and usage in Japan," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-30, December.
    20. Elise Frølich Furrebøe & Ellen Katrine Nyhus, 2022. "Financial self‐efficacy, financial literacy, and gender: A review," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 743-765, June.

    More about this item

    Keywords

    Social Influence; Financial Literacy; Saving Behavior.;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

    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:trp:01jefa:jefa0043. 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: David Simon Hall (email available below). General contact details of provider: .

    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.