Financial self-efficacy in aspiring entrepreneurs in Ghana: the moderating role of financial risk tolerance in predicting entrepreneurial intentions of university students

Abstract

In emerging economies like Ghana, fostering entrepreneurship is crucial for economic development, yet the understanding of psychological factors influencing entrepreneurial intention (EI) remains underexplored. Addressing this gap, our research specifically probes the effects of financial self-efficacy (FSE) and financial risk tolerance (FRT) on EI among university students in Ghana. The study also explores the moderating effect of FRT in the FSE-EI relationship. A cross-sectional survey design was employed, with data collected from 658 university students across private and public Ghanaian universities. PLS-structural equation modelling was used to examine the hypothesised relationships among FSE, FRT and EI. The results demonstrate that both FSE and FRT have significant positive effects on EI. Further, FRT significantly moderates the FSE-EI nexus. The findings offer valuable implications for educators, policymakers and entrepreneurship development programmes, suggesting the need to enhance financial self-efficacy and risk tolerance to cultivate EIs among potential entrepreneurs. The study extends the current understanding of EI by exploring the influence of FSE and FRT, contributing to the literature on the antecedents of EI. The focus on Ghanaian university students adds value to the discourse by providing empirical evidence from a less-examined context. Thus, this study provides actionable insights for entrepreneurship educators, policymakers, and training institutions in Ghana and similar emerging economies.