The Mediating Effect of Innovativeness on the Relationship between Financial Literacy and Risk-Taking Propensity: Implications for Graduates’ Readiness for Entrepreneurship

DOI:  https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.14685

Article Sidebar

PDF

Published: Jun 20, 2025
Issue: Vol. 27 No. 49 (2025)
Section Scientific and technological research article


Keywords: financial literacy risk-taking propensity innovativeness

Main Article Content

Authors

  Melvin Sarsale
Southern Leyte State University

Abstract

Objective: This article examined the mediating role of innovativeness between financial literacy and risk-taking tendency and its implications for graduates’ preparedness for self-employment. Methodology: This research employed a cross-sectional design with 157 students at a Philippine state university. Key findings: Filipino students who were surveyed had moderate financial literacy and entrepreneurial characteristics. Financial literacy, risk-taking willingness, and innovativeness also have a significant relationship. In addition, innovativeness mediates financial literacy and risk-taking willingness. Conclusion: Financial literacy and innovativeness influence entrepreneurial readiness. Graduates with these characteristics are more likely to be well-equipped to navigate the challenges and seize the opportunities of entrepreneurship. In response, educational institutions create specific interventions and educational programs to help aspiring students become entrepreneurs and self-employed individuals, help them manage and succeed in various aspects of their future entrepreneurial ventures.

How to Cite
Sarsale, M. (2025). The Mediating Effect of Innovativeness on the Relationship between Financial Literacy and Risk-Taking Propensity: Implications for Graduates’ Readiness for Entrepreneurship. Revista Universidad Y Empresa, 27(49), 1–20. https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.14685
References

Adewumi, S. (2022). Financial literacy and business risk-taking among business start-up students in Nigeria. Problems and Perspectives in Management, 20(2), 575-587. https://doi.org/10.21511/ppm.20(2).2022.47 DOI: https://doi.org/10.21511/ppm.20(2).2022.47

Ahmad, Z., Sharif, S., Ahmad, I., Abbas, S. M. W., & Shaheen, M. (2024). Does female descendent entrepreneur’s self-compassion and financial literacy matter for succession success? Journal of Family Business Management, 14(3), 437-461. https://doi.org/10.1108/JFBM-07-2023-0102 DOI: https://doi.org/10.1108/JFBM-07-2023-0102

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211. https://doi.org/10.1016/0749-5978(91)90020-T DOI: https://doi.org/10.1016/0749-5978(91)90020-T

Al-Mamary, Y. H., & Alshallaqi, M. (2022). Impact of autonomy, innovativeness, risk-taking, proactiveness, and competitive aggressiveness on students’ intention to start a new venture. Journal of Innovation & Knowledge, 7(4), 100239. https://doi.org/10.1016/j.jik.2022.100239 DOI: https://doi.org/10.1016/j.jik.2022.100239

Almeda, A., Balisi, L. M., Concepcion, R. A., Lofamia, J. C., Tapec, J. A., & Padayao, P. M. T. (2020). “Calculated risk-taking”: The success factors of entrepreneurial accountants. New Trends in Qualitative Research, 1, 8-29. https://doi.org/10.36367/ntqr.1.2020.8-29 DOI: https://doi.org/10.36367/ntqr.1.2020.8-29

Alshebami, A. S., & Al Marri, S. H. (2022). The impact of financial literacy on entrepreneurial intention: The mediating role of saving behavior. Frontiers in Psychology, 13, 911605. https://doi.org/10.3389/fpsyg.2022.911605 DOI: https://doi.org/10.3389/fpsyg.2022.911605

Anwar, I., & Saleem, I. (2019). Exploring entrepreneurial characteristics among university students: An evidence from India. Asia Pacific Journal of Innovation and Entrepreneurship, 13(3), 282-295. https://doi.org/10.1108/APJIE-07-2018-0044 DOI: https://doi.org/10.1108/APJIE-07-2018-0044

Becker, G. S. (1964). Human capital: A theoretical and empirical analysis, with special reference to education (Vol. 3). University of Chicago Press.

Burchi, A., Włodarczyk, B., Szturo, M., & Martelli, D. (2021). The effects of financial literacy on sustainable entrepreneurship. Sustainability, 13(9), 5070. https://doi.org/10.3390/su13095070 DOI: https://doi.org/10.3390/su13095070

Damoah, O. B. O. (2020). Strategic factors predicting the likelihood of youth entrepreneurship in Ghana: A logistic regression analysis. World Journal of Entrepreneurship, Management and Sustainable Development, 16(4), 389-401. https://doi.org/10.1108/WJEMSD-06-2018-0057 DOI: https://doi.org/10.1108/WJEMSD-06-2018-0057

Duréndez, A., Dieguez-Soto, J., & Madrid-Guijarro, A. (2023). The influence of ceo’s financial literacy on smes technological innovation: The mediating effects of mcs and risk-taking. Financial Innovation, 9(1), 15. https://doi.org/10.1186/s40854-022-00414-w DOI: https://doi.org/10.1186/s40854-022-00414-w

Fong, J. H., Koh, B. S., Mitchell, O. S., & Rohwedder, S. (2021). Financial literacy and financial decision-making at older ages. Pacific-Basin Finance Journal, 65, 101481. https://doi.org/10.1016/j.pacfin.2020.101481 DOI: https://doi.org/10.1016/j.pacfin.2020.101481

García-Lopera, F., Santos-Jaén, J. M., Palacios-Manzano, M., & Ruiz-Palomo, D. (2022). Exploring the effect of professionalization, risk-taking and technological innovation on business performance. PloS ONE, 17(2), e0263694. https://doi.org/10.1371/journal.pone.0263694 DOI: https://doi.org/10.1371/journal.pone.0263694

Giaccone, S. C., & Magnusson, M. (2022). Unveiling the role of risk‐taking in innovation:

Antecedents and effects. R&D Management, 52(1), 93-107. https://doi.org/10.1111/radm.12477 DOI: https://doi.org/10.1111/radm.12477

Guliman, D. O. (2020). The role of entrepreneur’s financial sophistication on the nexus of business strategy and sustainability indicators of Philippine microenterprises. Asia-Pacific Social Science Review, 20(3), 11. https://doi.org/10.59588/2350-8329.1321 DOI: https://doi.org/10.59588/2350-8329.1321

Hamdan, S. (2023). The entrepreneurial mindset: How to think like an innovator: Entrepreneurial mindset. Partridge Publishing Singapore.

Hermansson, C., & Jonsson, S. (2021). The impact of financial literacy and financial interest on risk tolerance. Journal of Behavioral and Experimental Finance, 29, 100450. https://doi.org/10.1016/j.jbef.2020.100450 DOI: https://doi.org/10.1016/j.jbef.2020.100450

Khursanaliyev, B., & Solidjonov, D. (2024). Foresight, innovation strategies, and technological guideline for turning a small business into a corporation. In E3S Web of Conferences (Vol. 538, p. 02015). EDP Sciences. https://doi.org/10.1051/e3sconf/202453802015 DOI: https://doi.org/10.1051/e3sconf/202453802015

Klapper, L., & Lusardi, A. (2020). Financial literacy and financial resilience: Evidence from around the world. Financial Management, 49(3), 589-614. https://doi.org/10.1111/fima.12283 DOI: https://doi.org/10.1111/fima.12283

Kulathunga, K. M. M. C. B., Ye, J., Sharma, S., & Weerathunga, P. R. (2020). How does technological and financial literacy influence SME performance: Mediating role of erm practices. Information, 11(6), Article 297. https://doi.org/10.3390/INFO11060297 DOI: https://doi.org/10.3390/info11060297

Kumar, P., Pillai, R., Kumar, N., & Tabash, M. I. (2023). The interplay of skills, digital financial literacy, capability, and autonomy in financial decision making and well-being. Borsa Istanbul Review, 23(1), 169-183. https://doi.org/10.1016/j.bir.2022.09.012 DOI: https://doi.org/10.1016/j.bir.2022.09.012

Liu, B., Wang, J., Chan, K. C., & Fung, A. (2021). The impact of entrepreneurs’ financial literacy on innovation within small and medium-sized enterprises. International Small Business Journal, 39(3), 228-246. https://doi.org/10.1177/0266242620959073 DOI: https://doi.org/10.1177/0266242620959073

Llanos-Contreras, O., Alonso-Dos-Santos, M., & Ribeiro-Soriano, D. (2020). Entrepreneurship and risk-taking in a post-disaster scenario. International Entrepreneurship and Management Journal, 16, 221-237. https://doi.org/10.1007/s11365-019-00590-9 DOI: https://doi.org/10.1007/s11365-019-00590-9

Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of management Review, 21(1), 135-172. https://doi.org/10.5465/amr.1996.9602161568 DOI: https://doi.org/10.2307/258632

Lusardi, A., & Messy, F. A. (2023). The importance of financial literacy and its impact on financial wellbeing. Journal of Financial Literacy and Wellbeing, 1(1), 1-11. https://doi.org/10.1017/flw.2023.8 DOI: https://doi.org/10.1017/flw.2023.8

Molina-García, A., Cisneros-Ruiz, A. J., López-Subires, M. D., & Diéguez-Soto, J. (2023). How does financial literacy influence undergraduates’ risk-taking propensity? The International Journal of Management Education, 21(3), Article 100840. https://doi.org/10.1016/j.ijme.2023.100840 DOI: https://doi.org/10.1016/j.ijme.2023.100840

Morales, R. P. (2023). Financial literacy of micro entrepreneurs in Daet, Camarines Norte. Iconic Research and Engineering Journals, 6(12), 114-141.

Murnieks, C. Y., Klotz, A. C., & Shepherd, D. A. (2020). Entrepreneurial motivation: A review of the literature and an agenda for future research. Journal of Organizational Behavior, 41(2), 115-143. https://doi.org/10.1002/job.2374 DOI: https://doi.org/10.1002/job.2374

Ogbari, M. E. (2023). Exploring the influence of entrepreneurial abilities on graduates’ risk-taking readiness. Journal of Entrepreneurial and Business Diversity, 1(1), 59-71. https://doi.org/10.38142/jebd.v1i1.56 DOI: https://doi.org/10.38142/jebd.v1i1.56

Omoniyi, I. B., & Bongani, G. T. (2022). Entrepreneurship education’s impact on South Africa’s economic growth and development. Academy of Entrepreneurship Journal, 28, 1-9.

Quezon, M. S., & Vergara, S. I. O. (2022). Entrepreneurial competencies and business performance of millennial entrepreneurs. Res Militaris, 12(6), 967-984.

Ranalan, R. L., Sajetarios, J. M., Plaza, S. B. M., & Ochida, H. J. (2022). The financial literacy and entrepreneurial intention among young professionals. The Pendulum, 17(1), 204-231.

Razafimahasolo, M., Borromeo, R., Sausa, L., Carpizo, R., & Sabado, J. (2016). Impact of financial literacy on level of stress and academic achievement among college students. AUP Research Journal, 19(2), 22-36.

Rhaiem, K., & Amara, N. (2021). Learning from innovation failures: A systematic review of the literature and research agenda. Review of Managerial Science, 15, 189-234. https://doi.org/10.1007/s11846-019-00339-2 DOI: https://doi.org/10.1007/s11846-019-00339-2

Shahzad, M. F., Khan, K. I., Saleem, S., & Rashid, T. (2021). What factors affect the entrepreneurial intention to start-ups? The role of entrepreneurial skills, propensity to take risks, and innovativeness in open business models. Journal of Open Innovation: Technology, Market, and Complexity, 7(3), 173. https://doi.org/10.3390/joitmc7030173 DOI: https://doi.org/10.3390/joitmc7030173

Song, Z., Mellon, G., & Shen, Z. (2020). Relationship between racial bias exposure, financial literacy, and entrepreneurial intention: An empirical investigation. Journal of Artificial Intelligence and Machine Learning in Management, 4(1), 42-55.

Suhada, T. A., Ford, J. A., Verreynne, M. L., & Indulska, M. (2021). Motivating individuals to contribute to firms’ non-pecuniary open innovation goals. Technovation, 102, 102233. https://doi.org/10.1016/j.technovation.2021.102233 DOI: https://doi.org/10.1016/j.technovation.2021.102233

Tipu, S. A. A., & Fantazy, K. (2023). Linking knowledge development with sustainable supply chain performance: Mediating effects of innovativeness, proactiveness and risk taking. International Journal of Productivity and Performance Management, 72(2), 491-515. https://doi.org/10.1108/IJPPM-01-2021-0034 DOI: https://doi.org/10.1108/IJPPM-01-2021-0034

Torres-Coronas, T., & Vidal-Blasco, M.A. (2019). The importance of perceived behavioral control as a determining element of entrepreneurial intention among university students. Universidad & Empresa, 21(37), 108-135. https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.6522 DOI: https://doi.org/10.12804/revistas.urosario.edu.co/empresa/a.6522

Urbach, N., & Ahlemann, F. (2010). Structural equation modeling in information systems research using partial least squares. Journal of Information Technology Theory and Application, 11(2), 5-40.

Voda, A. I., Martinez, I., Tiganas, C. G., Maha, L. G., & Filipeanu, D. (2019). Examining the effects of creativity and willingness to take risk on young students’ entrepreneurial intention. Transformations in Business & Economics, 18(2A), 469-489.

Wang, X., & Cheng, Z. (2020). Cross-sectional studies: Strengths, weaknesses, and recommendations.

Chest, 158(1), S65-S71. https://doi.org/10.1016/j.chest.2020.03.012 DOI: https://doi.org/10.1016/j.chest.2020.03.012

Williams, A. M., Rodríguez Sánchez, I., & Škokić, V. (2021). Innovation, risk, and uncertainty: A study of tourism entrepreneurs. Journal of Travel Research, 60(2), 293-311. https://doi.org/10.1177/0047287519896012 DOI: https://doi.org/10.1177/0047287519896012

Ye, J., & Kulathunga, K. M. M. C. B. (2019). How does financial literacy promote sustainability in smes? A developing country perspective. Sustainability, 11(10), 2990. https://doi.org/10.3390/su11102990 DOI: https://doi.org/10.3390/su11102990

Query Statistics

Downloads

Download data is not yet available.
Publcation metrics

0




 

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Los autores conservan los derechos de autor y garantizan a la revista el derecho de ser la primera publicación del trabajo al igual que licenciado bajo una Creative Commons Attribution License que permite a otros compartir el trabajo con un reconocimiento de la autoría del trabajo y la publicación inicial en esta revista.

Similar Articles

1 2 3 4 5 6 > >> 

You may also start an advanced similarity search for this article.