Individuals’ financial well-being has been recognised as an important concern to reach individuals’ general well-being and societal welfare. In this context, understanding how individuals can ensure ...a good state of financial well-being is a critical question. However, previous studies have not paid enough attention to underlying the mechanisms by which individuals achieve financial well-being. The purpose of this paper is to explore the influence of attitude to money on individuals’ financial well-being, placing the emphasis on the intervention of financial planning horizon, risk tolerance and individuals’ actual financial behaviour. Using Structural Equation Modelling and Process Procedure for SPSS, empirical evidence for a sample of 8554 Spanish individuals largely supports the proposed hypotheses. Indeed, it suggests that individuals’ attitude to money influences actual financial behaviour, besides planning horizon and risk tolerance, that both exert an influence over actual financial behaviour, and this, ultimately, influences individuals’ financial well-being. This study ends up by presenting the main implications of these findings.
Research on consumer financial vulnerability (CFV) was especially encouraged in the aftermath of the 2007–2008 financial crisis, becoming a phenomenon of global interest to academics and policy ...makers. This paper reviews the existing academic literature on CFV with the aim of mapping out four research fields (i.e., the concept, the measures, the methods, and the drivers of this phenomenon) and providing a roadmap for a future research agenda for this field. To this end, we review the last two decades of academic research on households’ financial vulnerability, thereby presenting a hybrid literature review. Evidence from a comprehensive analysis of 98 academic papers suggests that this is still an emerging and highly fragmented field and, therefore, a comprehensive future research agenda is offered, including concrete suggestions for research designs and measurements. The proposal of a homogeneous definition of financial vulnerability, the consideration of measures that include subjective aspects of the phenomenon, the use of qualitative methods, and the development of more detailed theoretical and empirical research on the drivers of CFV, are among the authors’ recommendations for future research.
Working capital management (WCM) is a key question for firms' profitability, especially for small and medium enterprises faced with severe financial restrictions and whose current assets account for ...a significant part of their investments. These features describe most firms in the livestock industry. However, studies on WCM related to these firms are scarce. Using a sample of 444 Spanish cheese‐manufacturing companies during the period 2010–2016 and applying a dynamic panel data methodology, this paper analyzes the extent to which the main components defining the WCM policies—days sales outstanding, days inventory outstanding (DIO), days payable outstanding (DPO), and cash conversion cycle (CCC)—affect firms' profitability. Empirical evidence reveals a negative effect of DIO and the CCC on firms' profitability, suggesting the need to reduce the level of inventory of cheese‐manufacturing companies. Similarly, the empirical evidence confirms a negative relationship between DPO and firms' profitability. EconLit Citations: C23, G31, L25, L79, Q12.
Depopulation is a major challenge for many rural inland areas, as is the case in a considerable number of rural municipalities in Galicia (north-western Spain). The pandemic had a considerable impact ...on internal migration in 2020, but it was far from being anywhere near high enough to reverse the ongoing trend of population decline, highlighting the need for further action. Thus, this paper has a twofold objective: firstly, to propose an index of rural sustainable development for the rural Galician municipalities, and secondly, to identify the factors related to it. In so doing, a composite index stemming from the Benefit of the Doubt methodology has been proposed in the first stage, an index built from four-dimension factors– economic, demographic, social, and environmental. The empirical evidence of this index has been compared with three additional ones (namely, common weights, super-efficiency, and geometric mean and logistic normalization models). In the second stage, the relationship between the composite index and a set of exogenous variables that affect rural development has been analyzed, the data confirming that the rates of female immigration and occupancy in the hospitality sector favors sustainable development, whereas the distance from the provincial capital hinders it. This paper paves the way for an assessment of the potentialities of each territory, and the evidence found allows actions to be supported that generate sustainable progress in rural Galician municipalities and that are useful for tackling this complex problem.
•A new rural sustainable development index based on four dimensions is proposed.•Strengths and weaknesses for each Galician rural municipality are identified.•Environmental factors constitute a driver of rural development in Galicia.•Social aspects (i.e., health, education, services) stand out as main weaknesses.•Policies to boost social care and attract childbearing-age inhabitants are paramount.
Credit restrictions, such as those happening in the current context shaped by the crisis derived from COVID-19, make working capital management (WCM) a driving force behind SME performance. This ...paper analyses whether WCM policies affect the economic and financial profitability of Spanish companies in the fish canning industry. Spain leads the EU’s production of canned seafood and the seafood industry is a key sector for the Spanish economy. To assess the WCM-profitability relationship, we applied a dynamic panel data methodology in a sample consisting of 377 companies during the period 2010–2018. We can conclude that the economic profitability of fish canning companies is related to the collection period (Days Sales Outstanding or DSO) and the inventory conversion period (Days Inventory Outstanding or DIO). Moreover, empirical evidence reveals the existence of an optimal level of receivables that balances the benefits of increasing sales and the opportunity costs of customer funding. The findings also identify a convex relationship between investment in inventory and economic profitability.
Abstract
Life insurance enhances households' capacity to absorb financial shocks and protects against personal risks that no one likes to contemplate. This is even more important in times of economic ...hardship such as now, when many Europe countries and particularly Spain are going through difficult times due to rising inflation, the war in Ukraine, and the ongoing COVID‐19 pandemic. Although previous studies have analysed the driving forces of life insurance demand, the influence of the individual's financial planning horizon, financial knowledge, and financial self‐control have been underexplored. This study analyses the influence of personal financial attributes on life insurance demand and, in so doing, explores whether the effects of such attitudes differ across different generational cohorts (i.e., the silent generation, baby boomers, Gen Xers, and millennials). The data, taken from the
Survey of Financial Competences
, comprises 7245 Spanish individuals. Evidence from multivariate analyses reflects the relevance of standard sociodemographic characteristics in explaining individuals' decisions to become life insurance holders. In contrast, evidence does not support a statistically significant relationship in the case of behavioural variables such as financial self‐control and the financial planning horizon.
PurposeThe ongoing evolution of the Internet and the subsequent digitalisation of financial services, along with the ever-increasing innovation of financial products, have rendered consumers more ...vulnerable to a wider range of fraud in the banking sector and, particularly, to consumer financial fraud (CFF). This paper aims to analyse the factors that may contribute to CFF exposure and victimisation among Spaniards, with a special focus on financial literacy.Design/methodology/approachThis paper provides a comprehensive overview of leading publications on the topic, followed by empirical analyses using regression models with a sample of 6,207 Spanish individuals drawn from the Survey of Financial Competences.FindingsObjective and subjective financial knowledge are positively correlated with CFF exposure via email but do not protect against CFF victimisation. Similarly, financial knowledge overconfidence is positively related to the former but fails to constitute a driver of the latter. Financial inclusion, measured by the number of financial products held, not only increases the risk of this exposure but also contributes to its subsequent victimisation.Originality/valueTo the best of the authors' knowledge, no previous paper has analysed the relationship between CFF and financial literacy by differentiating two types of vulnerabilities to fraud (exposure and victimisation) while considering different constructs of financial literacy. Dissecting these two domains may explain why the same financial literacy construct can have different effects at both stages of financial fraud and, furthermore, how different financial literacy constructs may affect the same stage of financial fraud.
In the aftermath of the 2007–08 financial crisis, the worsening financial conditions of households increased concerns about their financial vulnerability (FV). In this context, policymakers embraced ...the notion of financial knowledge to foster sound financial behaviors among individuals and households, aiming to mitigate the detrimental effects of FV on households’ financial wellbeing and the overall economy. However, the relationship between FV and financial literacy remains inconclusive. This lack of definitive findings may stem from limitations in measuring FV and narrow focus on specific dimensions of financial literacy. This paper analyzes the relationship between financial literacy and FV by creating a comprehensive measure of (the level of) FV and considering different dimensions of financial literacy. Using a sample of 8,554 individuals in Spain obtained from the 2016–17 Survey of Financial Competences, we construct a continuous measure of FV by using Nonlinear Principal Components Analysis (NLPCA). Then, we employ OLS and ordered probit regressions to examine the potential association between different dimensions of financial literacy and FV. The findings indicate that the level of FV is negatively related to self-perceived financial knowledge, while no statistically significant relationship is found regarding objective financial knowledge. Evidence also reveals that “highly financially included” individuals are more likely to exhibit financial resilience. These findings highlight the need for the development of financial education initiatives that are action-oriented.
Previous research has related household financial fragility (FF) and the employment status of the household members by focusing only on the labour income channel. In contrast, the literature has ...scarcely addressed the study of this relationship from a psychological perspective that could be related to the theory of bounded rationality. This article aims to analyse how job expectations relate to the level of household FF. Using a sample of 8554 Spanish individuals in the period 2016–2017, we construct a multidimensional index of household FF. The results indicate that households with unemployed, self-employed, or part-time workers have higher levels of FF, but the job expectations of the household and the individual play an even more important role in the level of the FF. These findings suggest that the perception of labour market uncertainty may influence the level of household FF to a greater extent than the objective employment situations of the individuals.
PurposeThis paper aims to explore the linkage between households' social interactions and credit context and how these interactions may influence household borrowing ...decisions.Design/methodology/approachBased on a sample of 45,907 individuals referred to 18 countries, drawn from the Survey of Health, Ageing and Retirement in Europe, different probit regressions are used to test the four hypotheses proposed.FindingsEmpirical evidence confirms that intensive and extensive sociability are positively related to consumer debt holding. However, when social activities are considered separately, there is weak evidence that they are also related to mortgage debt holding and over-indebtedness. Moreover, at this level of analysis, the different nature of the social activities in which the individual participates in may condition the relationship with borrowing behaviour. The findings also show that relative income plays a passive role in household borrowing behaviour, since low-income households are more likely to hold mortgage and informal loans or to be over-indebted in highly indebted countries.Originality/valueFirst, this paper extends the knowledge of the relationship between social interactions and borrowing behaviour by considering not only the intensity and diversity of the social activities in which the individual participates, but also the different nature of these activities. Second, it proposes that social interactions may play a passive role on borrowing decision, suggesting that household's behaviour might be passively affected by the density of borrowers surrounding it. To the best of our knowledge, there has not been any attempt to test this issue regarding household borrowing decisions. Third, unlike the few empirical papers on the topic, the paper also analyses previous issues by distinguishing between different types of debts; a distinction that revels the different role played by social interactions.
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