Financial Literacy and Firm performance The moderating role of financial capital availability and resource flexibility.

Abstract

Financial literacy, financial capital availability and resource flexibility are typically modelled as separate antecedents of firm performance. However, the boundary conditions for such models are less examined in a developing country context where financial literacy has been argued to be weak. Accordingly, drawing on RBV, we examined the performance implications of financial capital availability and resource flexibility on the financial literacy-firm performance relationship of entrepreneurial firms operating in a less developed market setting. Using a survey-based approach and employing OLS, we examined 298 entrepreneurial firms operating Ghana, a sub-Saharan African country. Our findings indicate that financial literacy improves firm performance and particularly so when resources are flexible and entrepreneurs are able to access finance with ease