THE EFFECT OF FINANCIAL LITERACY AND DIGITAL LITERACY ON ENTREPRENEURIAL INTENTION MEDIATED BY ENTREPRENEURIAL SELF-EFFICACY

Abstract

This research shares a background of increased desire for entrepreneurship in the digital age, where both financial literacy and digital literacy are seen as necessary antecedents of entrepreneurial intention. The purpose of this study is to investigate the effect of financial literacy and digital literacy on entrepreneurial intention, with entrepreneurial self-efficacy mediating both relationships. A quantitative study using Structural Equation Modeling–Partial Least Squares (SEM-PLS) was conducted on a sample of 300 individual entrepreneurs in Jakarta as the unit of analysis. The dimensions studied in the present study included financial literacy, digital literacy, entrepreneurial self-efficacy, and entrepreneurial intention. The research findings found financial literacy to be a statistically significant antecedent to entrepreneurial intention (β=0.203; t=3.264; p=0.001) and entrepreneurial self-efficacy (β=0.311; t=5.797; p=0.000); digital literacy was found to be a statistically significant antecedent to entrepreneurial intention (β=0.227; t=4.159; p=0.000) and entrepreneurial self-efficacy (β=0.439; t=8.571; p=0.000); entrepreneurial self-efficacy was a statistically significant antecedent to entrepreneurial intention (β=0.201; t=2.858; p=0.004) and was a significant mediator variable between financial literacy (β=0.063; t=2.470; p=0.014) and digital literacy (β=0.088; t=2.660; p=0.008) with entrepreneurial intention. The research suggests that

promoting financial literacy and digital literacy will improve the entrepreneurial self- efficacy, which can foster entrepreneurial intention.