The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana

TLDR

Literature confirms a positive link between access to finance and firm growth, but boundary conditions in developing economies remain underexplored. The study aims to test whether financial literacy moderates the access‑to‑finance and firm‑growth relationship. Using a resource‑based view framework, the authors empirically test a model with 201 Ghanaian SMEs through survey data. Results show that higher financial literacy strengthens the positive effect of access to finance on firm growth.

Abstract

The literature on access to finance has confirmed a positive relationship between access to finance and firm growth. Yet the boundary conditions for such linkage are less examined in the context of developing economies. This study draws on resource-based view to introduce financial literacy as a moderator of the relationship between access to finance and firm growth. This theoretically derived research model is empirically tested using survey data from 201 small and medium-sized enterprises in Ghana. Our empirical findings suggest that financial literacy positively enhances the access to finance-firm growth relationship.