Financial Literacy Effect on Behavioral Finance of SMEs in Province of Bali
Abstract
The purpose of this study was to analyze the effect of financial literacy variables on behavioral finance in the SMEs sector in Bali Province. This study is different from previous research that focused on factors affecting behavioral finance in capital market investors. The novelty lies in testing the behavioral finance variable in the SMEs sector with financial literacy as an exogenous variable. The population on this study was all SMEs that received the Bali Province SMEs Financing Access Improvement Activity Program in the 2019 fiscal year as many as 450 units spread across 9 regencies/cities throughout Bali Province. Samples were taken from each stratum based on the type of business and then proportionally taken in magnitude so that samples were obtained for research. Sampling was carried out through two stages. First, the respondents were from real sector SMEs. The second stage was the respondent have been registered as a taxpayer. The calculation model used the Slovin model. The calculation results showed that the number of samples was 211.76 or rounded to 212 samples. This research used a quantitative research design, which was based on the paradigm of positivism Based on the results of data processing. This study revealed that estimating structural model parameters showed the estimated value of financial literacy for behavioral finance of -0.692 and p value of 0.006. It means that value of the effect of financial literacy on the company's behavioral finance were negative and significant, it could be concluded that the hypothesis was accepted. These results showed that good financial literacy owned by SMEs owners in the financial sector was useful to make the right decisions for their companies. SMEs owners or managers were closely related to complex and strategic financial decision making, related to successfully achieving business goals and sustainability. Further research may add other proxies in measuring Balanced Scorecard performance, and other contingencies such as: the character and attitude of defense mechanisms.
Keywords: Behavioral Finance, Financial Literacy, SMEs.
1. INTRODUCTION
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