International Journal of Humanities Social Science and Management - 2024 : Enhancing Youth Entrepreneurship through Financial Behavior and Economic Literacy

Dr. Nora, Ibrahim and Nabila Elyana, Tasrip and Nur Hidayah, Zulkefli (2024) International Journal of Humanities Social Science and Management - 2024 : Enhancing Youth Entrepreneurship through Financial Behavior and Economic Literacy. International Journal of Humanities Social Science and Management, 4 (6). pp. 87-95. ISSN 3048-6874

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Abstract

This study examines the impact of financial behaviour and economic literacy on youth entrepreneurship, showing that these skills are essential for helping young entrepreneurs effectively manage resources and make informed decisions. Good financial practices, such as budgeting, saving, investing, and debt management, contribute to business sustainability and growth through efficient resource allocation and risk management. Economic literacy allows young entrepreneurs to understand market trends, pricing strategies, and economic cycles, helping them adapt to changes and identify opportunities. Together, these skills foster an entrepreneurial mindset, improve access to funding, and support long-term business success, building a resilient and knowledgeable new generation of entrepreneurs. Using Maslow's Hierarchy of Needs as a framework, the study explains how financial stability meets basic needs like food and shelter, allowing young entrepreneurs to focus on higher- level goals. The study’s reveals that financial behavior and economic literacy account for 62.3% of the variance in youth entrepreneurship outcomes. Financial behavior (H1) shows a significant positive relationship (β = 0.362), indicating that sound financial practices enhance entrepreneurial success by enabling resource management and risk-taking. Economic literacy (H2), while not as strong (β = 0.174), still plays a critical role by helping young entrepreneurs make informed choices and optimize business performance. These findings affirm the value of financial behavior and economic literacy in youth entrepreneurship, emphasizing the need to integrate these skills into youth development programs.challenges of starting, operating, and expanding a business. (Urefe et al., 2024). With a strong foundation in financial literacy, entrepreneurs can effectively budget, plan financially, and manage cash flow—crucial components for sustaining operations and achieving long-term growth (Lone, & Bhat,2024). Additionally, financial literacy aids in assessing risk and making informed investments, helping ensure the business's financial health. Entrepreneurs also need a broad skill set to effectively manage their ventures, including the ability to develop long-term financial strategies, evaluate business opportunities, and adapt to economic changes (Preston, et al., 2024). Familiarity with financial instruments such as loans, bonds, and equity enhance access to funding for growth. Financial management skills, combined with strong interpersonal abilities, are essential for working with employees, clients, and stakeholders, while industry-specific knowledge helps entrepreneurs navigate sector challenges and leverage new trends (Saeed, et al., 2024). The success of an enterprise relies on both demand- and supply-side factors. On the demand side, entrepreneurs must confirm a market for their offerings and align financial strategies with customer needs. On the supply side, resource management, financial stability, and efficient scaling are critical for business growth. Together, these elements, built on a foundation of financial literacy, enable entrepreneurs to thrive in competitive markets and drive sustainable development (Arquero, et al., 2024). Financial behavior and economic literacy are essential in supporting youth entrepreneurship, equipping young entrepreneurs to navigate complex financial and economic landscapes. Financial literacy, encompassing budgeting, saving, investing, and debt management, supports informed decision- making and helps avoid pitfalls that could lead to business failure. Meanwhile, economic literacy provides insights into market dynamics, including supply and demand, inflation, and economic trends,

Item Type:	Article
Uncontrolled Keywords:	youth entrepreneurship, financial behaviour, economic literacy
Divisions:	Institute of Graduate Studies (IGS)
Depositing User:	LIBRARY1 UPTM
Date Deposited:	16 Jul 2025 08:34
Last Modified:	16 Jul 2025 08:34
URI:	http://eprints.kuptm.edu.my/id/eprint/4873

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