HOW DOES FINANCIAL LITERACY IMPROVE SUSTAINABILITY BUSINESS IN BATIK SMEs?

Abstract

The business sustainability of the batik SMEs is a hot topic for research, considering that the batik industry has a historical and cultural background. This study aims to create a theoretical model of business sustainability that is influenced by financial literacy and is mediated by intellectual capital and risk attitudes. The research location was in Kediri, East Java province, with 36 respondents taken by simple random sampling. Data was taken using a questionnaire using a Likert scale. Data analysis uses the SEM structural equation with the SmartPLS application. The results showed that financial literacy had a positive and significant effect on business sustainability, financial literacy had a positive and significant effect on intellectual capital, and financial literacy had a positive and significant effect on risk attitude. Intellectual capital had a positive and significant effect on business sustainability. However, the risk attitude variable does not affect business sustainability. Then the effect of financial literacy on business sustainability mediated by intellectual capital has positive and significant results. Meanwhile, the influence of financial literacy on business sustainability mediated by risk attitude obtained insignificant results.