OIDA International Journal of Sustainable Development
Open-access peer-reviewed journal
https://doi.org/10.64211/oidaijsd190106
Beyond Financial Literacy: Behavioral Finance Mechanisms Driving Micro Enterprise Performance in Emerging Market Tourism
Shinta Maharani Trivena 1, Kadarisman Hidayat 2, Mukhammad Kholid Mawardi 3, Nur Imamah 4
1,2,3,4 Doctoral Program in Administrative Sciences, Faculty of Administrative Sciences, Universitas Brawijaya, Indonesia.
Volume 19, Issue 01, Pg, 95-110, 2026
Abstract: While enhanced Financial Literacy theoretically correlates with improved micro-business outcomes, empirical evidence reveals inconsistent findings across diverse contexts and regional markets. This contradiction exemplifies the knowledge-implementation gap within behavioral finance literature, where theoretical understanding fails to automatically translate into superior operational performance. This investigation analyzes the complex relationships between Financial Literacy and business effectiveness among micro-tourism operators through three critical mediating mechanisms: Financial Experience, Credit Access, and Financing Decisions within emerging economy contexts.
Data were collected from 383 micro-tourism business owners across the Greater Malang region, Indonesia, using a two-stage stratified proportional random sampling approach. This research utilized a quantitative explanatory approach through cross-sectional survey methodology. Statistical analysis utilized Partial Least Squares Structural Equation Modeling via SmartPLS 4.0, integrating four fundamental behavioral finance theoretical frameworks: Expected Utility Theory establishing rational choice foundations, Prospect Theory explaining cognitive biases and decision-making limitations, Signaling Theory addressing information asymmetries between micro-businesses and financial institutions, and Pecking Order Theory illuminating financing preference hierarchies within capital-constrained environments.
The analysis demonstrates that Financial Literacy lacks direct influence on Financial Performance (β = 0.019, p = 0.769), but rather operates through sequential mediation pathways involving Financial Experience, Credit Access, and Financing Decisions. Credit Access emerges as the strongest mediating pathway (β = 0.113, p < 0.001), followed by Financial Experience (β = 0.112, p < 0.01) and Financing Decisions (β = 0.068, p < 0.01). The comprehensive model explains 54.2% of Financial Performance variance with substantial predictive validity, providing robust empirical support for behavioral finance applications in micro-enterprise contexts.
The results suggest that MSME development initiatives require holistic ecosystem strategies that transcend conventional financial education approaches, incorporating enhanced Credit Access mechanisms, structured Financial Experience programs, and comprehensive decision-support systems. The research enhances behavioral finance scholarship by explaining the complex transformation processes by which Financial Literacy translates into Financial Performance within emerging market tourism contexts.
Keywords: Credit Access, Financing Decisions; Financial Experience, Financial Literacy, Financial Performance
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