FINANCIAL OUTCOMES OF THE LOCUS OF CONTROL: PLS-SEM EVIDENCE FROM CROATIA

Ana KUNDID Novokmet and Marija Vuković
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Ana KUNDID Novokmet: Faculty of Economics, Business and Tourism, University of Split, Split, Croatia
Marija Vuković: Faculty of Economics, Business and Tourism, University of Split, Split, Croatia

Studies in Business and Economics, 2024, vol. 19, issue 2, 138-154

Abstract: Raising importance of personality traits within the financial decision-making literature inspired us to conduct a research with locus of control in the main role for achieving financial benefits in personal finance. PLS-SEM analysis was adopted using the data set of 130 Croatian citizens who took part in a questionnaire survey. We confirmed that external locus of control is detrimental to self-control, which afterwards reflects in personal finance management. To be more precise, people with less developed self-control are more prone towards compulsive buying, materialism and indebtedness. Personality traits such as locus of control are usually stable among adults. Thus, mainly self-control can be exercised and improved. That is the key message of this article for external people and various providers of financial literacy programs – change is possible and manageable principally via practicing self-control. Nevertheless, the subsequent studies could offer a more detailed insight into the interplays between locus of control, financial literacy, self-control and financial outcomes.

Keywords: locus of control; behavioural finance; personal finance management; questionnaire survey; PLS-SEM (search for similar items in EconPapers)
Date: 2024
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