The role of learning motivation on financial knowledge among Vietnamese college students

• Published date: 01 January 2023
• Author: Trang M. T. Phung,Quoc N. Tran,Phuong Nguyen‐Hoang,Nhut H. Nguyen,Tho H. Nguyen
• Date: 01 January 2023
• DOI: http://doi.org/10.1111/joca.12511

RESEARCH ARTICLE

The role of learning motivation on

financial knowledge among Vietnamese

college students

Trang M. T. Phung

1

| Quoc N. Tran

2

|

Phuong Nguyen-Hoang

3

| Nhut H. Nguyen

4

| Tho H. Nguyen

5

1

Faculty of Economics and Business,

Hoa Sen University, Ho Chi Minh City,

Vietnam

2

School of Business, University of

Management and Technology,

Ho Chi Minh City, Vietnam

3

School of Planning and Public Affairs

and Public Policy Center, University of

Iowa, Iowa, Iowa, USA

4

Department of Finance, Auckland

University of Technology, Auckland,

New Zealand

5

School of Management, University of

Economics Ho Chi Minh City, Ho Chi

Minh City, Vietnam

Correspondence

Nhut H. Nguyen, Department of Finance,

Auckland University of Technology,

42 Wakefield Street, Auckland Central

1010, New Zealand.

Email: nhut.nguyen@aut.ac.nz

Funding information

University of Economics Ho

Chi Minh City

Abstract

Using survey data from 730 undergraduates in Vietnam,

we find that learning motivation and its components,

especially self-efficacy, finance learning value, and

achievement goals, significantly correlate with students'

financial literacy performance. In addition, these corre-

lations are moderated by student characteristics, among

which academic seniority, university type, parents' edu-

cation, and extra math study during high school matter

the most. Our results raise significant implications to

policymakers, researchers, and educators that include

understanding the role of motivation and incorporating

it in financial literacy education and intervention

programs and considering the moderation roles that

individuals' characteristics play in the motivation-

financial literacy link. We encourage more research

in these areas.

KEYWORDS

financial knowledge, financial literacy, motivation, self-

efficacy, Vietnam

Received: 23 June 2021 Revised: 14 December 2022 Accepted: 28 December 2022

DOI: 10.1111/joca.12511

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits

use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or

adaptations are made.

© 2023 The Authors. Journal of Consumer Affairs published by Wiley Periodicals LLC on behalf of American Council on Consumer

Interests.

J Consum Aff. 2023;57:529–563. wileyonlinelibrary.com/journal/joca 529

1|INTRODUCTION

Financial literacy, the ability to understand and effectively use economic and financial information,

is essential to one's financial well-being.

1

Many studies have shown that people with high financial

literacy save more, borrow less, better plan for their retirement, and are more likely to participate in

stock markets (e.g., Christelis et al., 2010; Klapper et al., 2013; Lusardi & Mitchell, 2007,2008;

Lusardi & Mitchell, 2017;Tang&Baker,2016; van Rooij et al., 2011). In contrast, poor financial lit-

eracy is associated with over-indebtedness, costly and risky borrowing, mortgage default, and inabil-

ity to cope with negative income shocks (e.g., Courchane et al., 2004; Gerardi et al., 2013; Klapper

et al., 2013; Lusardi & Tufano, 2015; Santini et al., 2019;Stango&Zinman,2009).

The importance of financial literacy becomes even more critical these days when financial

services and products are more accessible to many people thanks to the rapid growth of finan-

cial technology. Failure to equip investors and customers with sufficient financial knowledge to

make informed financial choices could jeopardize not only their financial health but also the

stability and efficient growth of the entire financial system (e.g., Klapper & Lusardi, 2020;

Widdowson & Hailwood, 2007). Governments and educators have implemented numerous

interventions to improve financial literacy, including one-to-one counseling, financial seminars,

workshops, training courses, and interactive web-based programs. However, these efforts are

apparently not very effective. In a meta-analysis, Fernandes et al. (2014) find that financial edu-

cation interventions in 90 empirical studies prior to 2014 account for only 0.1% of the variance

in financial behaviors, and that the effect is weaker in low-income samples and becomes negli-

gible after 20 months. Based on data from the Standard & Poor's 2014 Ratings Services Global

Financial Literacy Survey spanning 140 countries, Klapper and Lusardi (2020) find that only

one in three adults are financially literate, and that financial illiteracy is significantly worse in

developing countries. Low financial literacy is becoming an alarming global issue, and as a

result, it is necessary to find better solutions to enhance financial knowledge.

Learning motivation involves beliefs, emotions, and strategies that help individuals to sustain

the pursuit of their learning goals and is often conceptualized in various constructs including self-

efficacy, performance goals, achievement goals, task value, and effort (e.g., Eccles & Wigfield, 2002;

Garcia & Pintrich, 1995;Schunketal.,2014). In this paper, we examine the role of learning motiva-

tion on financial literacy. There are several reasons for our study. First, we believe that external

interventions to improve financial knowledge need to be accompanied by interventions to enhance

the power of learning motivation. Bolduc (2000) states that “the best way to begin explaining why

people are not successful (even when they know how to be) is by learning about the power of moti-

vation.”Educators have long believed that motivation affects what students learn and how well

they apply these skills and knowledge. Studies on effective learning (e.g., Keller, 1987,2010;Kuyper

et al., 2000; Pintrich et al., 1993) acknowledge that motivation is the keytoincreasinglearningout-

comes because it is important for one's change process, critical thinking, learning strategy, and

achievement. Researchers have reported ample evidence that learning motivation generally predicts

students' academic performance (Crede & Phillips, 2011). Therefore, we expect learning motivation

is positively correlated with financial literacy.

Second, the extant literature on financial literacy has reported various factors that affect

financial literacy. They include age, gender, ethnicity, education, cognitive ability, employment,

and parental background (e.g., Christelis et al., 2010; Grohmann et al., 2015; Lusardi, 2011;

Lusardi et al., 2010; Tang & Peter, 2015). However, there is limited research on the impact of

learning motivation on financial literacy. For example, Mandel and Klein (2007), who use data

from the US national Jump$tart survey of high school seniors, find that motivations to avoid

530 PHUNG ET AL.

financial difficulty, pay bills, and save for retirement are significantly correlated with financial

literacy scores. In a survey sample of 362 undergraduate students from a public university in

the US, Jacobsen and Correta (2019) do not find a significant relation between students' motiva-

tion and their performance in the financial literacy test. Our study is motivated by these limited

but important findings on the link between motivation and financial literacy. Our research is

also in support of OECD's (2016) calling for more investigation into factors that are important

to financial literacy and its associated outcomes.

Finally, this study responds to the call for more financial literacy research in different cul-

tural and societal contexts (Goyal & Kumar, 2021). Our research is the first study that

addresses the link between motivation and financial literacy in Vietnam. Klapper and Lusardi

(2020) report that only 24% of surveyed adults in Vietnam could correctly answer at least

three out of five financial literacy questions. Given that the Vietnamese government has

increased education spending to 20% of its budget in recent years and that there has been an

increasing num ber of education an d training establ ishments,

2

low financial literacy has raised

serious concerns to the government regarding the effectiveness of the country's education sys-

tem. In addition, despite the involvement of various government bodies, organizations, educa-

tion providers in developing and delivering financial education in Vietnam over the past

decade, the impact of these programs on participants' financial literacy and financial behav-

iors are inconclusive due to lack of a rigorous evaluation framework (Nguyen, 2021).

3

With

the Decision No. 149/GD-TTg in 2020, the Vietnamese government has set ambitious objec-

tives for its National Financial Inclusion (NFI) program to transform Vietnam into digital

government, digital economy, and digital society by 2025–2030. One of the key objectives is to

improve financial literacy of its people and small and medium-sized enterprises. Our research

focus on students who are not only an essential group of the digital generation but also poten-

tial future entrepreneurs contributing to the country's economic growth. Hence, students'

financial literary and its associated factors are critically important to policymakers and educa-

tors for the success of the NFI program.

The rest of the paper is organized as follows. Section 2reviews related literature and

states the hypotheses. Section 3presents data and sample statistics. Section 4displays the

results on the determinants of financial literacy. Section 5discusses the results' implica-

tions and limitations.

2|LITERATURE REVIEW AND HYPOTHESES

Using the 2014 S&P Global Financial Literacy Survey for 140 countries, Klapper and Lusardi (2020)

find that the average financial literacy among young adults between 15 and 35 years of age is only

35%, and this is driven by those fromemergingeconomies.Withinthissample,Vietnam'soverall

rank is relatively low with 24% of its surveyed participants are financially literate. Compared to its

Southeast Asian neighbors, it is higher than Cambodia (18%), similar to the Philippines (25%), and

lower than Thailand (27%), Indonesia (32%), Malaysia (36%), Myanmar (52%), and Singapore (59%).

The low financial literacy, together with 69% of the country's population not having a bank

account,

4

poses challenges to the government's NFI program since financially inexperienced users

may not be able to optimize the benefits of (digital access to) financial products and services and

avoid consumer risks if they do not possess sufficient financial knowledge.

A deficiency in basic financial literacy could result in an individual's poor decisions to save,

borrow, and invest. The extant literature has reported ample evidence on the negative impact of

PHUNG ET AL.531