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The Impact of Limited Financial Literacy on Student Entrepreneurial Engagement and Timing

  • Full or part time
    Dr Thompson
  • Application Deadline
    Applications accepted all year round
  • Self-Funded PhD Students Only
    Self-Funded PhD Students Only

Project Description

Financial literacy has an important role in enabling individuals to achieve their long-term interests through making financial decisions in a timely, knowledgeable and coherent fashion (Lusardi and Mitchell, 2011; van Rooij et al., 2011). The UK government in partnership with the Financial Services Authority (FSA) launched a seven point program in March 2006 aiming to substantially improve the levels of financial literacy among the population (Atkinson et al., 2007). However, others doubt the ability of educators to provide the skills necessary (Willis, 2008; Mandell and Klein, 2009). At the same time in an attempt to raise economic growth the various governments of the UK have tried to transform the UK economy into one of the most enterprising in the world (Department for Business, Innovation and Skills, 2010; BERR, 2008). Following calls for entrepreneurship to be embedded in all subjects and levels of education (Thursby, 2005), initiatives including compulsory provision of entrepreneurship education have been introduced (Gillie, 2012). However, the success of entrepreneurship education in increasing business start-up activity is questioned (Thompson and Kwong, 2015), with students often wishing to delay engagement with entrepreneurial activities until they have acquired more experience (Kwong and Thompson, 2016). This delay can lead to the dissipation of entrepreneurial intentions as other challenges in life take over (Kwong et al., 2012). Equally, engagement without sufficient skills such as financial literacy is also likely to negatively influence the success or performance of any business starts (Oseifuah, 2010). What hasn’t been investigated up until now is whether poor financial literacy is one of the primary factors delaying entrepreneurial engagement and to what extent current university courses are enabling students to overcome such barriers or to ensure that students are aware of the need for such skills.

The study would use a mixed methods approach. Using a survey instrument that both collected relevant measures of financial literacy (Huston, 2010) and entrepreneurial intentions (Kwong and Thompson, 2016), the study would use statistical and econometric analysis to establish the links between financial literacy and the intended timing of business starts for students at a UK university. In-depth interviews would be utilised to examine the key concerns and attitudes that lead to any links between financial literacy and the timing of entrepreneurial endeavours.


Atkinson, A. McKay, S. Kempson, E. and Collard, S. (2006) Levels of Financial Capability in the UK: Results of a baseline survey, London: Financial Services Authority.
BERR (2008) Unlocking the UK’s Talent. BERR: London. Department for Business, Innovation and Skills (2014) Business Population Estimates for the UK and Regions 2014, Sheffield: Department for Business, Innovation and Skills.
Gillie C (2012) Enterprise Education in Schools, London: House of Commons.
Huston, S. J. (2010) ‘Measuring Financial Literacy’, Journal of Consumer Affairs, 44 (2), 296-316.
Kwong, C. and Thompson, P. (2016) ‘The when and why: student entrepreneurial aspirations’, Journal of Small Business Management, 54 (1), 299-318.
Kwong, C. C. Y. Thompson, P. Cheung, C. W. M. (2012) ‘The effectiveness of social business plan competitions in developing social and civic awareness and participation’, Academy of Management Learning and Education, 11 (3), 324-348.
Lusardi, A. and Mitchell, O. S. (2011) ‘Financial literacity around the world: an overview’, Journal of Pension Economics and Finance, 10 (4), 497-508.
Mandell, L. and Klein, L. S. (2009) ‘The impact of financial literacy education on subsequent financial behavior’, Journal of Financial Counseling and Planning, 20 (1), 15-24.
Oseifuah, E. K. (2010) ‘Financial literacy and youth entrepreneurship in South Africa’, African Journal of Economic and Management Studies, 1 (2), 164-182.
Thompson, P. and Kwong, C. (2015) ‘Compulsory school-based enterprise education as a gateway to an entrepreneurial career’, International Small Business Journal, DOI: 10.1177/0266242615592186.
Thursby, M. C. (2005) ‘Introducing technology entrepreneurship to graduate education: an integrative approach’, Advances in the Study of Entrepreneurship, Innovation and Economic Growth, 16, 211-240.
Van Rooij M. Lusardi, A. and Alessi, R. (2011) ‘Financial literacy and stock market participation’, Journal of Financial Economics, 101 (2), 449-472.
Willis, L. E. (2008) ‘Against financial-literacy education’, Iowa Law Review, 94 (1), 197-285.

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