The Moderating Role of Financial Literacy Between Entrepreneurial Personality Traits and Entrepreneurial Self-Efficacy (ESE) – An Empirical Investigation

Abstract

The purpose of this study is to investigate the effect of entrepreneurial personality traits (need for achievement (NaCH), innovativeness, proactiveness, and optimism) on entrepreneurial self-efficacy (ESE) of entrepreneurs, with the moderating role of financial literacy. A survey was conducted in Northern India using non-probability snowball sampling with the help of a measurement scale adopted from previous studies, and gathered a sample of 125 large-scale entrepreneurs. Grounded in Social Cognitive Theory (SCT), the proposed hypothesis was formulated and tested using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that (a) all four personality traits significantly predict ESE, highlighting their importance in fostering entrepreneurial confidence, (b) however, financial literacy does not significantly moderate these relationships, suggesting that intrinsic personality factors may wield a more direct influence on ESE than contextual financial knowledge. The novel contribution of this study shifts focus from student-based samples to actual entrepreneurs by critically evaluating the boundary conditions of trait–context interactions. This research presents several practical and theoretical implications for academics, government and non-government entrepreneurship-supporting organisations. The study also presents various future avenues which can help shape the field of entrepreneurial scholarship.