Moderating role of social capital on the effect of financial behavior on financial inclusion
-
Author(s)Chike Onodugo ,Ifeoma OnodugoLink to ORCID Index: https://orcid.org/0000-0002-4462-1293
,
Anastasia Ogbo
,
Henry OkwoLink to ORCID Index: https://orcid.org/0000-0002-4994-8199
,
Charles Ogbaekirigwe
-
DOIhttp://dx.doi.org/10.21511/ppm.19(3).2021.41
-
Article InfoVolume 19 2021, Issue #3, pp. 502-512
- Cited by
- 527 Views
-
216 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The need for improved institutional interventions aimed at increasing access to financial services by small and medium enterprises (SMEs) has been emphasized. Complimenting these efforts, this study proposes that building social networks capable of informing requisite financial behaviors would facilitate the financial inclusion of SMEs co-existing in business clusters. This study aimed to empirically test the moderating influence of collective action, bonding, trust, and bridging on the effect of financial behavior on financial inclusion. Using a sample of 311 owners/managers of small and medium scale businesses in sub-urban clusters in South-Eastern Nigeria, the hierarchical moderated regression analysis was used to test the hypotheses of the study. Results show a positive main effect of financial behavior on financial inclusion
(βf = 0.162; t (304) = 1.503; p < 0.05). Also, collective action (βfca = 0.201; t (304) = 6.906; p < 0.05) and bridging (βfbr = 0.201; t (304) = 6.906; p < 0.05) had positive moderating effects, bonding (βfb = 0.032; t (304) = 1.423; p > 0.05) and trust (βft = 0.014; t (304) = 0.9609; p > 0.05) were statistically insignificant. For policy implications, social virtues such as bridging and collective action are more veritable tools for financial inclusion than the personal virtues of trust and bonding and should be factored into economic and social intervention being deployed by institutions interested in meeting the banking/financial needs of businesses.
- Keywords
-
JEL Classification (Paper profile tab)M10, G53, M14
-
References50
-
Tables2
-
Figures2
-
- Figures 1. Simple slope for the statistically significant moderating role of collective action
- Figures 2. Simple slope for the statistically significant moderating role of bridging
-
- Table 1. Means, Cronbach’s alpha, and zero-order correlations
- Table 2. Results on the main and moderating effects
-
- Aboagye, J., & Jung, J. Y. (2018). Debt holding, financial behavior, and financial satisfaction. Journal of Financial Counseling and Planning, 29(2), 208-218.
- Adger, W. N. (2010). Social capital, collective action, and adaptation to climate change. In M. Voss (Ed.), Der Klimawandel (pp. 327-345). VS Verlag für Sozialwissenschaften.
- Aldrich, D. P., & Meyer, M. A. (2015). Social capital and community resilience. American Behavioral Scientist, 59(2), 254-269.
- Alessie, R., van Rooij, M., & Lusardi, A. (2011). Financial literacy and retirement preparation in the Netherlands. Journal of Pension Economics and Finance, 10(4), 527-545.
- Alliance for Financial Inclusion. (2012). A Quick Guide to the Maya Declaration on Financial Inclusion.
- Arisi-Nwugballa, E. A. (2016). Evaluating the Relationship between Work-Family Conflict and Organisational Commitment among Rural Women Health Workers in Ebonyi State, Nigeria. International Journal of Academic Research in Business and Social Sciences, 6(5), 528-540.
- Asongu, S. A., & Odhiambo, N. M. (2019). How enhancing information and communication technology has affected inequality in Africa for sustainable development: An empirical investigation. Sustainable Development, 27(4), 647-656.
- Atkinson, A., & Messy, F.-A. (2012). Measuring Financial Literacy: Results of the OECD INFE Pilot Study (OECD Working Papers on Finance, Insurance and Private Pensions No. 15). Paris.
- Beck, T., Demirgüç-Kunt, A., & Peria, M. S. M. (2008). Banking services for everyone? Barriers to bank access and use around the world. World Bank Economic Review, 22(3), 397-430.
- Bongomin, G. O. C., Ntayi, J. M., Munene, J. C., & Nabeta, N. I. (2016). Social capital: mediator of financial literacy and financial inclusion in rural Uganda. Review of International Business and Strategy, 26(2), 291-312.
- Bongomin, G. O. C., Ntayi, J. M., & Malinga, A. C. (2018a). Institutions and financial inclusion in rural Uganda : The mediating role of social capital. Journal of African Business, 19(2), 244-261.
- Bongomin, G. O. C., Ntayi, J. M., Munene, J. C., & Malinga, A. C. (2018b). Mobile Money and Financial Inclusion in Sub-Saharan Africa: the Moderating Role of Social Networks. Journal of African Business, 19(3), 361-384.
- Burt, R. S. (1997). A note on social capital and network content. Social Networks, 19(4), 355-373.
- Cao, Q., Simsek, Z., & Jansen, J. J. P. (2015). CEO social capital and entrepreneurial orientation of the firm: Bonding and bridging effects. Journal of Management, 41(7), 1957-1981.
- Central Bank of Nigeria. (2019). Bill and Melinda Gates Foundation reals commitment to closing Gender Gap in Africa. Financial Inclusion Newsletter, 4(2), 1-22.
- Claessens, S. (2006). Access to financial services: A review of the issues and public policy objectives. The World Bank Research Observer, 21(2), 207-240.
- Demirgüç-Kunt, A., & Klapper, L. (2012). Measuring Financial Inclusion: The Global Findex Database (Policy Research Working Paper WPS6025). Washington, DC: World Bank.
- Demirgüç-Kunt, A., Feyen, E., & Levine, R. (2012). Benchmarking Financial Systems around the World (Global Financial Development Report 2013). World Bank.
- Fan, Z., & Zhang, R. (2017). Financial inclusion, entry barriers, and entrepreneurship: Evidence from China. Sustainability, 9(2), 203.
- Fiksenbaum, L., Marjanovic, Z., & Greenglass, E. (2017). Financial threat and individuals’ willingness to change financial behavior. Review of Behavioral Finance, 9(2), 128-147.
- Garcés-Galdeano, L., Larraza-Kintana, M., Cruz, C., & Contín-Pilart, I. (2017). Just about money? CEO satisfaction and firm performance in small family firms. Small Business Economics, 49(4), 825-839.
- Gennaioli, N., la Porta, R., Lopez-de-silanes, F., & Shleifer, A. (2013). Human capital and regional development. Quarterly Journal of Economics, 128(1), 105-164.
- Goel, N., & Madan, P. (2019). Benchmarking financial inclusion for women entrepreneurship – a study of Uttarakhand state of India. Benchmarking: An International Journal, 26(1), 160-175.
- Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence. World Development, 111, 84-96.
- Guiso, L., Sapienza, P., & Zingales, L. (2009). Cultural biases in economic exchange? Quarterly Journal of Economics, 124(3), 1095-1131.
- Hadi, N. A., & Kamaluddin, A. (2015). Social collateral, repayment rates, and the creation of capital among the clients of microfinance. Procedia Economics and Finance, 31, 823-828.
- Hanson, D., Hanson, J., Vardon, P., McFarlane, K., Speare, R., & Dürrheim, D. (2008). Documenting the development of social capital in a community safety promotion network: It’s not what you know but who you know. Health Promotion Journal of Australia, 19(2), 144-151.
- Heikkilä, A., Kalmi, P., & Ruuskanen, O. P. (2016). Social Capital and Access to Credit: Evidence from Uganda. Journal of Development Studies, 52(9), 1273-1288.
- Huston, S. J. (2010). Measuring financial literacy. The Journal of Consumer Affairs, 44(2), 296-316.
- Islam, A., Muzi, S., & Rodriguez Meza, J. L. (2018). Does mobile money use increase firms’ investment? Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania. Small Business Economics, 51(3), 687-708.
- Karlan, D. (2007). Social Connections and Group Banking. The Economic Journal, 117(517), F52-F84.
- Kim, D.-W., Yu, J.-S., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1-14.
- Kim, J.-H. (2016). A study on the effect of financial inclusion on the relationship between income inequality and economic growth relationship between income inequality and economic growth. Emerging Markets Finance and Trade, 52(2), 498-512.
- Koivunen, T., & Tuorila, H. (2015). Consumer trust relations with payment cards and banks: An exploratory study. International Journal of Consumer Studies, 39(2), 85-93.
- Landerretche, O. M., & Martínez, C. (2013). Voluntary savings, financial behavior, and pension finance literacy: Evidence from Chile. Journal of Pension Economics and Finance, 12(3), 251-297.
- Lewis, R. J., Villasenor, J. D., & West, D. M. (2017). The 2017 Brookings Financial and Digital Inclusion Project Report: Building a Secure and Inclusive Global Financial Ecosystem. Washington, DC: Center for Technology Innovation at Brookings.
- Nnadozie, E. (2002). African Indigenous Entrepreneurship Determinants of Resurgence and Growth of Igbo Entrepreneurship During the Post-Biafra Period Emmanuel. Journal of African Business, 3(1), 49-80.
- OECD. (2001). The well-being of nations: The role of human and social capital.
- Paul, C. J., Weinthal, E. S., Bellemare, M. F., & Jeuland, M. A. (2016). Social capital, trust, and adaptation to climate change: Evidence from rural Ethiopia. Global Environmental Change, 36, 124-138.
- Rooij, M. Van, Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472.
- Santoro, G., Messeni-Petruzzelli, A., & Del Giudice, M. (2020). Searching for resilience: the impact of employee-level and entrepreneur-level resilience on firm performance in small family firms. Small Business Economics, 1, 455-471.
- Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613-628.
- Servon, L. J., & Kaestner, R. (2008). Consumer financial literacy and the impact of online banking on the financial behavior of lower-income bank customers. Journal of Consumer Affairs, 42(2), 271-305.
- Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470.
- SMEDAN & NBS. (2013). SMEDAN and National Bureau of Statistics collaborative survey: Selected findings.
- Stromback, C., Lind, T., Skagerlund, K., Vastfjall, D., & Tinghog, G. (2017). Does self-control predict financial behavior and financial well-being. Journal of Behavioral and Experimental Finance, 14, 30-38.
- Wedig, G. J. (1994). Risk, leverage, donations and dividends-in-kind: A theory of nonprofit financial behavior. International Review of Economics & Finance, 3(3), 257-278.
- Woolcock, M., & Narayan, D. (2000). Social capital: Implications for development theory, research, and policy. World Bank Research Observer, 15(2), 225-249.
- Wu, W., Firth, M., & Rui, O. M. (2014). Trust and the provision of trade credit. Journal of Banking & Finance, 39, 146-159.
- Xu, X. (2020). Trust and financial inclusion: A cross-country study. Finance Research Letters, 35, 101310.
-
Corporate governance and financial performance: an empirical analysis of selected multinational firms in Nigeria
Gideon Tayo Akinleye , Odunayo Olarewaju 
,
Bamikole Samson Fajuyagbe
doi: http://dx.doi.org/10.21511/ppm.17(1).2019.02
Problems and Perspectives in Management Volume 17, 2019 Issue #1 pp. 11-18 Views: 2684 Downloads: 381 TO CITE АНОТАЦІЯThis study focused on corporate governance and performance of selected Nigerian multinational firms from 2012 to 2016. Specifically, the study focused on the effect of board size, activism and committee activism on return on asset and firm growth rate. Secondary data collected from four multinational firms were analyzed via static panel estimation techniques. While board size and board activism exerted significant negative impact on return on asset, committee activism exerted insignificant impact. The results of the study further showed that board size and board activism exert insignificant negative impact on firm’s growth rate, while committee activism insignificantly spurs firm’s growth rate. Decisively, discoveries from this study reflect that corporate governance has significant negative impact on return on asset, but has insignificant influence on the growth rate of Nigerian multinational firms. Based on these findings, the authors recommended that corporate governance dynamics in firms world over should be reconsidered, such that it gives credence to more than just numbers of persons or meetings held, but the main reasons and deliberations in such meetings. It was also recommended that excessive increase in magnitude or frequency of meetings held by board of directors cum committee should be avoided.
-
Measuring the inclusiveness of international financing to tourism in Latin America and the Caribbean
Isabel Carrillo-Hidalgo ,
Juan Ignacio Pulido-Fernández
doi: http://dx.doi.org/10.21511/imfi.15(3).2018.02
Investment Management and Financial Innovations Volume 15, 2018 Issue #3 pp. 15-34 Views: 1974 Downloads: 152 TO CITE АНОТАЦІЯGlobally, tourism has been identified as a means of poverty reduction and development, and as a means of encouragement of females, minorities and small businesses to better engage in the mainstream of economic life. This paper examines whether the international and governmental financial support, grated by international financial institutions, is effectively achieving these aims in Latin America and the Caribbean. A series of indices are established in the paper that assess the extent to which such funding includes non-corporate enterprise while also considering the volume and nature of such funding. It is concluded that the goals of inclusiveness are not being met.
-
The role of financial inclusion in financial stability: lesson from Jordan
Mohammad O. Al-Smadi
doi: http://dx.doi.org/10.21511/bbs.13(4).2018.03
Banks and Bank Systems Volume 13, 2018 Issue #4 pp. 31-39 Views: 1542 Downloads: 243 TO CITE АНОТАЦІЯThis study aims to examine the relationship between financial inclusion and financial stability in Jordan by using Fully Modified Least Squares (FMOLS) technique. The analysis is based on time series from 2006 to 2017. Jordanian financial inclusion index is developed to assess the level of financial inclusion, whereas financial stability was measured by Jordanian financial stability index proposed by Central Bank of Jordan. The results show a weak significant and positive impact of financial inclusion on the financial stability in Jordan. Additionally, five control variables are used in the study. The results show a negative impact of domestic credit to private sector, income inequality, financial integration, and global financial crisis on financial stability. In contrast, real GDP per capita has a significant and positive impact. It is expected that the findings of the study can be used by policy makers and supervising authorities to realize the objectives of the national strategy of financial inclusion in Jordan.
