Title: Profit and prosperity: the impact of financial literacy on small business growth

Authors: S. Bharathithasan; K. Sakthi Srinivasan

Addresses: VIT Business School, VIT University, Vellore-14, Tamil Nadu, India ' VIT Business School, VIT University, Vellore-14, Tamil Nadu, India

Abstract: This study examines the link between financial literacy and microbusiness success for Udyam-registered ME owners in Tamil Nadu, India. It employs a cross-sectional survey involving 385 participants selected through snowball sampling. The survey covers financial literacy, technology use, business success, and demographics. Through descriptive statistics and structural equation modelling (SEM), the study identifies a significant positive connection between financial literacy and microbusiness success (beta: 0.345). Additionally, technology utilisation is found to moderate this relationship, evidenced by a significant interaction between financial literacy and technology use. Education and business location also impact microbusiness success significantly. The research enhances understanding of financial literacy's role in microbusiness success in Tamil Nadu, providing practical insights for stakeholders aiming to foster regional microenterprise growth. The study underscores the significance of financial literacy and technology adoption, suggesting targeted interventions for enhancing microbusiness success. SEM offers a comprehensive approach, unravelling the intricate dynamics that influence microbusiness prosperity.

Keywords: business success; financial literacy; microenterprises; MSMEs; technology utilisation; structural equation modelling; SEM.

DOI: 10.1504/IJWI.2024.139442

International Journal of Work Innovation, 2024 Vol.5 No.3, pp.270 - 291

Received: 28 Aug 2023
Accepted: 02 Sep 2023
Published online: 02 Jul 2024 *

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