The Effect of Financial Literature and Financial Capital on Business Performance in Small Medium Micro Enterprises (MSMEs) in Central Java

Vina Putri Anjelia and Wuryaningsih Dwi Lestari ()
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Vina Putri Anjelia: Muhammadiyah University of Surakarta (UMS)
Wuryaningsih Dwi Lestari: Muhammadiyah University of Surakarta (UMS)

A chapter in Proceedings of the International Conference on Economics and Business Studies (ICOEBS-22-2), 2024, pp 788-797 from Springer

Abstract: Abstract This study aims to analyze the effect of financial literacy and financial capital on the business performance of MSMEs in Central Java. Financial literacy and financial capital are very important for business performance because to achieve good performance in business activities, business owners need to understand how to manage finances well. The populations in this study are MSMEs in Central Java, especially in the Grobogan Regency. The sampling technique used was the purposive sampling method. The type of data used was primary data, namely data obtained directly from the source. Data collection methods were questionnaires and interviews. Then the data were analyzed using the classical assumption test, validity test, reliability test, descriptive test, multiple linear regression test, and hypothesis testing. The results of the study prove that financial literacy has a significant positive effect on MSMEs business performance and financial capital has a significant positive effect on MSMEs business performance. Simultaneously financial literacy and financial capital also have a significant positive effect on MSMEs business performance. From the results of this study, it is hoped that readers can develop knowledge and be able to implement this knowledge in the business sector because the business will not be able to develop properly if their human resources cannot manage finances properly.

Keywords: Financial Literacy; Financial Capital; Business Performance; MSMEs (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-204-0_65

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