Effects of Financial Knowledge on Rationality of Financial Behavior in College Student: A Mediation Model

Financial literacy extends beyond mere knowledge, encompassing attitudes, behaviors, and skills. This study draws on the self-efficacy theory to investigate how different levels of financial knowledge impact the rationality of financial behavior among college students. By introducing a moderated mediation model, this research investigates the mediating role of generalized self-efficacy. Through a meticulous survey involving 4676 Chinese college students, the study reveals significant insights. Firstly, it establishes that the financial knowledge possessed by college students significantly and positively influences their financial behavior rationality. Secondly, it reveals that generalized self-efficacy partially mediates the complex relationship between financial knowledge and financial behavior rationality. This research not only contributes to the existing body of financial literacy literature but also enhances our understanding by thoroughly scrutinizing the mechanisms through which college students’ financial knowledge shapes their financial behavior rationality. The findings highlight the importance of considering not only the information students possess but also the role of their self-efficacy in translating that knowledge into prudent financial behavior. As financial literacy is crucial in navigating the complexities of the modern financial landscape, this study provides valuable insights that can inform educational strategies and interventions aimed at enhancing the financial well-being of college students.