The Moderating Role of Family Commitments on Financial Attitude of Family Business Toward Debt

Stephanus Remond Waworuntu, Dhiyaa Alyaa Chani Wudd

Abstract


Family business has been an interesting topic to discuss because of its uniqueness. The family business is owned, managed, controlled, and operated by the family members. Accordingly, the personal experience of each family member, as the top-level decision maker, affects the business most, including financial attitude toward debt. The financial decisions made by the family business are different because, in the family business, the decision-making is often based on nonfinancial factors. Then, it is crucial to know what factors are affecting and how they affect the financial attitude toward debt in the family business. This research investigates financial knowledge, positive experience with creditors, economic goal orientation, and perceived financial literacy toward financial attitude toward debt, with family commitment to the business as the moderator. To find out the result, this study takes quantitative data from 97 owners of the family business in Surabaya, Indonesia, using SEM-PLS to analyze the data. As a result, not all independent variables affect the financial attitude toward debt, positive experience with creditors does not significantly affect the financial attitude toward debt. Family commitment to the business also weakens the effect of positive experiences with creditors, economic goal orientation, and perceived financial literacy toward financial attitude toward debt.

 

Keywords: Financial Knowledge, Positive Experience with Creditors, Economic Goal Orientation, Family Commitment, Financial Attitude toward Debt.


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DOI: http://dx.doi.org/10.33021/ideas.v3i2.5103

DOI (PDF): http://dx.doi.org/10.33021/ideas.v3i2.5103.g1802

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