Decoding Financial Behavior: A PLS-SEM Examination of Financial Knowledge, Socialization, and Attitude in Saudi Business Students

Purpose – The main aim of this study is to examine the interplay of factors influencing financial behavior among undergraduate business students in Saudi Arabia. A clear understanding of these relationships will help policy makers and educational institutions promote sound financial behavior among business students leading to improved financial and societal outcomes. Design/methodology/approach – This research employs a cross-sectional design and included a sample of 438 undergraduate business students from a public university in Saudi Arabia. Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to analyze the relationships among financial knowledge, financial attitude, financial socialization, and financial behavior. Findings – The results indicate that financial education significantly enhances financial knowledge, while academic performance does not. Financial socialization significantly influences both financial attitude and financial behavior but does not significantly influence financial knowledge. Practical Implications – The study emphasizes the importance of integrating financial literacy modules into university curricula and encouraging financial socialization initiatives within families. Additionally, the findings suggest that financial institutions, educational bodies, and policy makers should coordinate their efforts to improve financial behavior among young adults, aligning with the Saudi Vision 2030. Social Implications – This study has notable social implications, demonstrating the role of financial knowledge and financial socialization in shaping financial behavior. Encouraging positive financial behavior of young managers is essential for achieving broader national goals, particularly financial transformation, as envisioned in Saudi Vision 2030. Originality – The financial behavior of future managers in the Arab world remains an under-researched topic, which this study seeks to address. By empirically analyzing the relationships among academic factors, financial knowledge, financial socialization, financial attitude, and financial behavior, this research provides new insights into financial behavior studies.