Financial literacy plays a decisive role in shaping how university students think and act like entrepreneurs, outweighing the influence of motivation and self-confidence. This conclusion comes from a 2026 peer-reviewed study by Agung Edy Wibowo, Asman Abnur, and Hendra Syaiful of Batam Tourism Polytechnic, published in the International Journal of Applied Educational Research. The findings matter as universities worldwide race to prepare graduates for uncertain job markets and innovation-driven economies, where entrepreneurial thinking is increasingly seen as a core life skill.
The research examined how intrinsic motivation, self-efficacy (belief in one’s own abilities), and financial literacy interact to form an entrepreneurial mindset among undergraduate students. While motivation and confidence are often highlighted in entrepreneurship education, the study shows they are not enough on their own. Practical financial knowledge turns out to be the missing link that enables students to translate internal drive into entrepreneurial thinking.
Why Entrepreneurial Mindset Matters Today
Across many countries, including Indonesia, higher education is under pressure to produce graduates who are not only employable but also adaptable, innovative, and capable of creating opportunities for themselves and others. Governments promote entrepreneurship as a solution to youth unemployment and economic resilience, while universities embed entrepreneurship courses across disciplines.
An entrepreneurial mindset goes beyond starting a business. It includes recognizing opportunities, managing risk, making decisions under uncertainty, and learning from failure. Many education programs try to nurture this mindset by boosting students’ motivation and confidence. However, without the ability to understand cash flow, costs, risks, and financial consequences, those psychological traits may never develop into real entrepreneurial thinking.
How the Study Was Conducted
The research involved 81 undergraduate students who had completed introductory courses in accounting, financial management, or entrepreneurship. The authors gathered data using structured questionnaires and analyzed the relationships between motivation, self-efficacy, financial literacy, and entrepreneurial mindset using a comprehensive statistical model.
Rather than focusing only on whether each factor mattered individually, the study examined how these factors worked together. This approach made it possible to identify which elements truly drive entrepreneurial thinking and which ones need support from other competencies.
Key Findings at a Glance
The results offer a clear message for educators and policymakers:
- Financial literacy has a strong and direct positive effect on entrepreneurial mindset. Students who understand financial concepts are far more likely to think strategically about opportunities and risks.
- Intrinsic motivation alone does not significantly shape entrepreneurial mindset. Being interested or internally driven is not enough without practical skills.
- Self-efficacy alone also shows no significant direct effect. Confidence in one’s abilities does not automatically lead to entrepreneurial thinking.
- Financial literacy strengthens the impact of intrinsic motivation. Motivated students develop a stronger entrepreneurial mindset when they also possess financial knowledge.
- Financial literacy does not strengthen the effect of self-efficacy. Confidence without applied financial understanding remains limited.
Together, these variables explain 93.8 percent of the variation in students’ entrepreneurial mindset, a remarkably high level of explanatory power in social science research.
Turning Motivation Into Action
According to the authors, financial literacy acts as a bridge between intention and action. Students may feel motivated or confident, but without the ability to evaluate costs, manage resources, and assess financial risk, their mindset remains abstract.
Agung Edy Wibowo and colleagues note that students with stronger financial literacy are better equipped to judge whether a business idea is feasible, how much risk is acceptable, and how to adapt when conditions change. This aligns with modern entrepreneurship thinking, which emphasizes learning by doing and making decisions based on available resources rather than perfect plans.
In their analysis, the authors highlight that financial literacy provides the “means” that allow motivated individuals to act entrepreneurially. When motivation is paired with financial understanding, students are more likely to adopt opportunity-oriented and problem-solving ways of thinking.
Implications for Universities and Policymakers
The findings suggest that entrepreneurship education should move beyond inspirational talks and confidence-building exercises. Instead, it should integrate applied financial literacy as a core component of the curriculum.
For universities, this means embedding practical financial decision-making into entrepreneurship courses, using real-world case studies, simulations, and project-based learning. Students should practice reading financial information, managing budgets, and evaluating risk as part of their entrepreneurial training.
For policymakers, the study reinforces the importance of financial literacy as a national education priority. Programs that combine entrepreneurship education with financial capability can better prepare young people to navigate uncertain economic environments, whether they start businesses or work within organizations.
The results are also relevant for industry and society at large. Many startups fail not because founders lack passion, but because they mismanage finances. Strengthening financial literacy at the university level could improve the sustainability of future businesses and contribute to broader economic stability.
Academic Insight From the Authors
In discussing their findings, the authors from Batam Tourism Polytechnic emphasize that psychological traits and competencies must work together. Motivation and confidence create potential, but financial literacy turns that potential into structured entrepreneurial thinking. Without it, students may struggle to move from ideas to informed action.
Source
Journal Article: Determining the Effect of Intrinsic Motivation and Self-Efficacy on Entrepreneurial Mind-set with Financial Literacy as a Moderating Variable
Journal: International Journal of Applied Educational Research
Year: 2026
DOI: https://doi.org/10.59890/ijaer.v4i1.189
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