Financial Literacy and Entrepreneurship: Analysis of Portuguese Start-Up Entrepreneurs

Financial literacy has been the focus of extensive research in recent years, with its relevance becoming particularly evident following the effects of the 2008 financial crisis. On the other hand, entrepreneurship is characterized as a catalyst for the development and economic growth of any country. Therefore, the level of financial literacy among entrepreneurs represents a vital element of an informed decision-making process aligned with business success, thereby contributing to the financial stability of an economy. Despite its importance, there have been few studies conducted in Portugal on this topic. In a sample of 107 Portuguese entrepreneurs whose companies are in the incubation phase, this research examines the level of their financial literacy, identifies groups with higher and lower levels, and investigates factors that influence and are influenced by this level. It was found that these entrepreneurs possess a good level of financial literacy, and factors such as gender, educational background, professional experience, and company size influence financial literacy. Among the three dimensions constitute this level of financial literacy, financial knowledge proves to be the most significant, and a high level of financial literacy enables effective financial management and planning for entrepreneurs and their businesses. In light of the information above, it is crucial for entrepreneurs to significantly enhance their financial skills in order to contribute to business success and, consequently, the economic growth of the country.