Date of Degree

12-2024

Document Type

Dissertation

Degree Name

Doctor of Business Administration (DBA)

Program

Business Administration

Advisor

Ernesto Escobedo

Advisor

Dawn Liguez

Advisor

Dawn Benitez

Abstract

ABSTRACT

Investigating the Relationship Between Employee Financial Literacy

Education and Small Business Performance in the Southwest Region of Texas

December 2024

Blake Beltran, Doctor of Business Administration

University of the Incarnate Word

Chair of Advisory Committee: Dr. Ernesto Escobedo

This study addressed the relationship between employee financial literacy education and the performance of small businesses in the Southwest Region of Texas, focusing on critical performance indicators, such as revenue growth, cost efficiency, and net profit margins. The researcher aimed to assess how financial literacy education among employees can impact the financial decision-making processes and, consequently, the performance metrics of small businesses across diverse sectors. The study was guided by Lusardi and Mitchell’s (2014) conceptual framework of financial literacy, which suggests that financial knowledge is essential for informed decision-making.

The importance of financial literacy has been well-documented, with studies showing its significant implications for both personal financial success and organizational performance. The National Foundation for Credit Counseling (NFCC; Poll, 2017) and Bank of America’s (2016) reports highlighted a pervasive lack of financial confidence and knowledge among adults, including Millennials, who represent a substantial segment of the current workforce. This deficiency in financial literacy is not only a personal issue but also extends into the professional realm, potentially affecting financial health and decision-making within small businesses (Creditcards.com, 2013; Federal Reserve, 2003).

Despite the recognized need for financial literacy, a notable gap exists in the literature regarding the direct impact of employee financial literacy programs on the key performance indicators (KPIs) of small businesses, particularly within an urban environment such as the Southwest Region of Texas. The researcher sought to bridge this gap by examining the extent to which financial literacy programs influence financial performance metrics and exploring possible correlations between employee financial literacy levels and the accuracy of financial reporting. The examination also involved assessing how improvements in financial knowledge may enhance financial decision-making processes within small businesses.

This study is justified by the potential benefits that enhanced financial literacy could bring to small businesses, which are vital to economic growth and stability. By analyzing the effects of financial literacy on business performance metrics, this research could reveal sector-specific trends or outcomes, offering valuable insights for policymakers, educators, and business owners. The literature review incorporates key findings from sources such as Bhushan and Medury (2013), Collins and O'Rourke (2010), Joo (2008), and Xiao and O'Neill (2016). The findings address the determinants of financial literacy, the promise of financial education, and its impact on financial capability and consumer behavior. This study may contribute to the existing body of knowledge by allowing targeted research on the specific effect of financial literacy programs on the KPIs of small businesses. Through a comprehensive examination of the current state of financial literacy among employees and its impact on small business performance, this study may offer a novel perspective on the economic importance of financial literacy within the small business sector.

Keywords: consumer behavior, financial literacy, key performance indicators, small business

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