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Micro-entrepreneurs towards the twin sustainable and digital transition. Does financial literacy play a role?

Year: 2024

Type: article

Abstract: The digital and sustainable transitions represent two strategic drivers of growth and innovation for micro-, small-, and medium-sized enterprises. This is especially relevant for micro-firms, which significantly lag behind larger firms in these areas. Financial literacy can play a key role in guiding small entrepreneurs to make sound financial choices and make the so-called twin transition successful. We exploit a survey conducted by the Bank of Italy in 2021 – involving about 2,000 non-financial firms with less than 10 employees – to investigate whether financial literacy acts as a driver for the twin transition. Through instrumental variable estimation, we find evidence of a causal link between financial literacy and both digitalisation and engagement in sustainable activities.

Source: Journal of Financial Literacy and Wellbeing

DOI: 10.1017/flw.2025.10002

Authors: Alessio D’Ignazio, Daniela Marconi, Massimiliano Stacchini

Institution: Bank of Italy

Language: English

Topic: Financial Literacy and Behavior

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,450