Research Article 3 113
Journal of Management Sciences - Volume 8, Issue 2 2021
By Muhammad Sadil Ali, Imran Ullah Khan Marwat
10.20547/jms.2014.2108204
Keywords: Financial literacy, saving behavior, self-efficacy, social cognitive theory, life cycle hypothesis.

Based on social cognitive theory and life cycle hypothesis, this paper investigates the impact of financial literacy on saving behavior with mediating role of self-efficacy. Data was collected from 342 respondents by using self-administered questionnaire. Multiple regression analysis was applied to test the hypotheses while Preacher and Hayes (2004) method was used to estimate the mediation effect. Results of this study indicate that financial literacy positively associated with saving behavior suggesting high financial literacy leads to enhance positive saving behavior. It is also observed that financial literacy positively impacts self-efficacy and increases individual's confidence in taking financial decisions. In line with social cognitive theory, results of the study show that self-efficacy positively affects saving behavior. It is also found that self-efficacy mediates the link between financial literacy and saving behavior. Finding of this study has significant implications for policy makers, employees and households, in the sense that they can better facilitate savings and improve wellbeing of nation by taking right financial and saving decisions.

Submission Date: 27 Jun, 2021 Reviews Completed: 21 Sep, 2021
Acceptance Date: 26 Sep, 2021 Publication Date: 9 Oct, 2021