The Relationship between Financial Literacy, Rational Financing Decision, and Financial Performance: An Empirical Study of Small and Medium Enterprises in Makassar
Hubungan antara Literasi Kewangan, Keputusan Pembiayaan Rasional dan Prestasi Kewangan: Kajian Empirikal Perusahaan Kecil dan Sederhana di Makassar

Department of Management
Makassar College of Economics Bongaya
Lt. Gen. Andi Mappaoudang Street no. 28, Makassar, South
Sulawesi, Indonesia

irfaisohilauw@stiem-bongaya.ac.id

Department of Management
Hasanuddin University Faculty of Economics and Business
Perintis Kemerdekaan Street KM 10, Makassar, South
Sulawesi, Indonesia

mursalimnohong@fe.unhas.ac.id

Faculty of Economics
Indonesia Open University
Cabe Raya Street, Pamulang, South Tangerang, Indonesia

sylvana@ecampus.ut.ac.id

Abstract

This research analyzes the effect of Financial Literacy, Rational Financing Decision, Financial Capital, and SME Financial Performance. A survey approach is used for data collection from a sample of financed SMEs in Makassar City. Using the cluster method technique and stratified random sampling, 279 samples are obtained and analyzed with Structural Equation Modeling with the AMOS Software. The results show that Financial Literacy significantly affects Rational Financing Decision and Financial Capital. Rational Financing Decision significantly affects Financial Capital. Furthermore, Financial Literacy and Capital significantly affects performance. Moreover, Rational Financing Decision does not significantly affect Financial Performance. The study shows that Financial Capital is not a Moderator variable in explaining the relationship between Financial Literacy and Rational Financing Decision with Financial Performance. This research implies that financial institutions should be careful in providing loans to SMEs.

Keywords

financial capital; financial literacy; financial performance; rational financing decision
https://doi.org/10.17576/pengurusan-2020-59-09

Citation

Sohilauw, M. I., Nohong, M., & Sylvana, A. (2020). The Relationship between Financial Literacy, Rational Financing Decision, and Financial Performance: An Empirical Study of Small and Medium Enterprises in Makassar. Jurnal Pengurusan, 59, 89–102. https://doi.org/10.17576/pengurusan-2020-59-09

@article{sohilauw2020relationship,
  title={The Relationship between Financial Literacy, Rational Financing Decision, and Financial Performance: An Empirical Study of Small and Medium Enterprises in Makassar},
  author={Sohilauw, Muhammad Irfai and Nohong, Mursalim and Sylvana, Andi},
  journal={Jurnal Pengurusan},
 

volume={59},
  number={},
  pages={89—102},
  year={2020},
  doi={https://doi.org/10.17576/pengurusan-2020-59-09},
  publisher={Penerbit UKM},
}

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59 (2020) 89 – 102

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