The Effects of Financial Literacy on Sustainable Entrepreneurship

Alberto Burchi, Bogdan Włodarczyk, Marek Szturo and Duccio Martelli
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Alberto Burchi: Department of Economics, University of Perugia, 06123 Perugia, Italy
Bogdan Włodarczyk: Department of Finance, Faculty of Economic Sciences, University of Warmia and Mazury, 10-720 Olsztyn, Poland
Marek Szturo: Department of Finance, Faculty of Economic Sciences, University of Warmia and Mazury, 10-720 Olsztyn, Poland
Duccio Martelli: Department of Economics, University of Perugia, 06123 Perugia, Italy

Sustainability, 2021, vol. 13, issue 9, 1-21

Abstract: Entrepreneurship contributes to the economic well-being of every country. Specifically, the level of individual entrepreneurship is crucial in the process of developing and building economic potential, especially in Central European countries. Among the several factors impacting entrepreneurship, the ability to access the necessary external sources of financing need to be considered crucial. The financial literacy of the entrepreneur plays a crucial role in the relationship between the lender and the borrower. In this paper, we investigate the effects of financial literacy on sustainable entrepreneurship. We based our analysis on the framework proposed by the World Economic Forum. We present an OLS model that adopts entrepreneurship, financial literacy and macroeconomic variables. The analysis is carried out on individual and national data from different sources of information (Global Entrepreneurship Monitor, World Bank, and Organization for Economic Co-operation and Development). The results show a positive and statistically significant relationship between financial literacy and sustainable entrepreneurial activity. This evidence supports the increasing number of financial education initiatives and the inclusion of topics related to economic and financial culture in school education systems. We identify internationally valid policy implications. In the context of the growth strategies of Central European countries, financial literacy takes on even greater importance. The introduction of financial education in the national curricula could strengthen entrepreneurial skills and accelerate the inclusive growth process across Europe.

Keywords: sustainable entrepreneurship; financial literacy; MSMEs (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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