The Role of Financial Literacy in Moderation of the Influence of Working Capital Management on MSME Performance

DOI

10.2991/978-94-6239-752-1_7How to use a DOI?

Keywords

Working Capital; Literacy Finance; MSME Performance

Abstract

This study is motivated by the importance of effective working capital management in ensuring the sustainability of Micro, Small, and Medium Enterprises (MSMEs) in an increasingly competitive business environment. The main research problem addressed in this study is whether financial literacy strengthens the relationship between working capital management and MSME performance. Accordingly, the study aims to examine the effect of working capital management on MSME performance and to investigate the moderating role of financial literacy. A quantitative research approach was employed using primary data collected through questionnaires distributed to 100 MSME owners in Sumur Bandung District. The data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The findings reveal that working capital management has a positive and significant effect on MSME performance. However, financial literacy does not significantly moderate the relationship between working capital management and MSME performance. These findings suggest that the success of MSMEs is primarily determined by the effectiveness of working capital management rather than by the level of financial literacy. This study contributes to the existing literature by providing new evidence that, although financial literacy is an important managerial capability, effective working capital management remains the primary driver of improved MSME performance, thereby offering a different perspective from previous studies that have placed greater emphasis on financial literacy.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Wati Aris Astuti
AU  - Ony Widilestariningtyas
AU  - Nisa Fauziyah
AU  - Gendis Wardani
PY  - 2026
DA  - 2026/09/04
TI  - The Role of Financial Literacy in Moderation of the Influence of Working Capital Management on MSME Performance
BT  - Proceedings of the9th International Conference on Business, Economics, Social Sciences & Humanities – Economics, Business and Management Track (ICOBEST-EBM 2026)
PB  - Atlantis Press
SP  - 75
EP  - 88
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-752-1_7
DO  - 10.2991/978-94-6239-752-1_7
ID  - Astuti2026
ER  -