During COVID‐19, impact of subjective and objective financial knowledge and economic insecurity on financial management behavior: Mediating role of financial wellbeing

• Published date: 01 December 2022
• Author: Shahzad Ali,Nighat Talha
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2789

RESEARCH ARTICLE

During COVID-19, impact of subjective and objective financial

knowledge and economic insecurity on financial management

behavior: Mediating role of financial wellbeing

Shahzad Ali

1,2

| Nighat Talha

2

1

Faculty of Management Sciences, The

Superior University, Lahore, Pakistan

2

Universiti Utara Malaysia

Correspondence

Shahzad Ali, Faculty of Management Sciences,

The Superior University, Lahore, Pakistan.

Email: shahzadalird@gmail.com

The purpose of this research is to look into financial management behavior during

the COVID-19. Without a doubt, financial knowledge is an important, but in the

COVID-19, the majority of people are experiencing economic insecurity, which is

regarded as unique contribution when testing financial management behavior.

Furthermore, Pakistan is an Islamic country, so, financial knowledge, is further sub-

divided into objective, subjective, and Islamic financial knowledge, with financial

wellbeing serving as mediating variable. Pakistan has a diverse population of respon-

dents, this model was tested on university students in Pakistan between the ages of

20 and 40, with the majority of respondents experiencing job and food insecurity as

a result of COVID-19. The research employs a two-stage method, PLS-SEM, for reli-

ability checking via composite reliability and average variance extract, and discrimi-

nant validity checking via HTMT ratio. According to the findings, Islamic financial

knowledge as positive, and other financial knowledge as negative, and economic

insecurity (food and job insecurity) also has negative and significant impact on stu-

dents' financial management behavior. Financial well-being significantly acts as a

bridge between independents and dependent variables. The findings imply that finan-

cial knowledge has a significant impact on financial management behavior.

Policymakers and administrators should improve information disclosure while pro-

moting financial education in order to foster trust and responsible financial conduct

among people.

KEYWORDS

COVID-19, economic insecurity, financial management behavior, financial well-being, Islamic

financial knowledge, objective and subjective financial knowledge

1|INTRODUCTION

Financial decision-making is considered a vital issue for students, busi-

ness people, and investors in various ventures. During the pandemic,

globally, financial management activities are observed tremendously

decline. According to Bapat (2020), Economists and financial advertisers

of financial services concentrated on strengthening domestic financial

decision-making and money planning behavior. Therefore, financial

knowledge (Grable et al., 2020;Robb&Woodyard,2011;Tang&

Baker, 2016) and economic insecurity (Anderson & Pontusson, 2007;

Gaunt & Benjamin, 2007;Witte,1999),Both have an essential role while

management of financial behavior is taken into account. This study's

main concern is contributing to the literature using financial knowledge

(subjective and objective financial knowledge), which is under research

(Lind et al., 2020). The primary goal of this study is to contribute to the

literature by combining objective and subjective financial knowledge as

well as Islamic financial knowledge, with economic insecurity which is

less common when financial management behavior is investigated.

Received: 22 March 2021 Revised: 5 June 2021 Accepted: 24 October 2021

DOI: 10.1002/pa.2789

J Public Affairs. 2022;22(Suppl. 1):e2789. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1of8

https://doi.org/10.1002/pa.2789