Financial literacy and competitive advantage: SME strategy in reducing business risk
Mursalim Nohong, Muhammad Ali, Cepi Pahlevi, Julius Djilbert, and Muhammad Irfai S

Departemen Manajemen Fakultas Ekonomi dan Bisnis UNHAS

Abstract

This study aims to explain the effect of financial literacy, rational financing decision, capital structure on improving the competitiveness of SMEs in Makassar. The data used are primary and secondary data obtained by using questionnaires and publications related to SMEs. The number of units of analysis used as a sample of respondents are as much as 266 with the consideration that this number has exceeded the minimum sample size in the study as Likert said that the sample was taken at least 30, 50, 75, 100 or multiples thereof. The results showed that financial literacy had a significant and positive effect on capital structure, financial literacy had a positive and significant effect on rational financing decision, rational financing decision had a positive and significant effect on capital structure, rational financing decision had a positive and significant effect on risk management, a positive and significant effect competitiveness, capital structure has a positive and significant effect on competitiveness and capital structure has a positive and significant effect on risk management. In addition, there was also a significant indirect effect between financial literacy on competitiveness through the capital structure. The coefficient with positive sign means that the higher the financial literacy, the higher the competitiveness through the capital structure. There is also a significant indirect effect between financial literacy on risk management through capital structure. This means that the higher the financial literacy, the higher the risk management effort through the capital structure.

Keywords: financial literacy, competitiveness, risk management

Topic: Socio-economic issues