Assessing Financial Well-Being in Free Trade Zone Regions: Evidence from Multi-Group Analysis

Badriatul Mawadah; Jacelyn Jacelyn; Isnaini Nuzula Agustin; Izzatul Jannah

doi:10.55980/ebasr.v5i3.459

Authors

Badriatul Mawadah Faculty of Business and Management, Universitas Internasional Batam, Indonesia
Jacelyn Jacelyn Faculty of Business and Management, Universitas Internasional Batam, Indonesia
Isnaini Nuzula Agustin Faculty of Business and Management, Universitas Internasional Batam, Indonesia
Izzatul Jannah Business Management, Batam State Polytechnic, Batam, Indonesia

DOI:

https://doi.org/10.55980/ebasr.v5i3.459

Keywords:

Digital Financial Literacy, Financial Health, Financial Well-being, Personal Financial Management Behavior, Multi Group Analysis

Abstract

This study examines the direct and indirect influence of digital financial literacy on financial well-being through financial health and personal financial management behavior as mediating variables, while also comparing the relationships across poor and vulnerable poor, lower-middle, middle, and upper-income groups. The study gathered data from 312 respondents, representing 7 regencies/cities in the Riau Islands Province and analyzed using the Partial Least Squares Multi Group Analysis (PLS-MGA). Digital financial literacy does not directly affect financial well-being. However, it positively influences financial health and personal financial management behavior, which subsequently improves financial well-being. Furthermore, the Multi-Group Analysis (MGA) reveals that most relationships are consistent across expenditure groups, except for the relationship between digital financial literacy and financial well-being. The lower-middle expenditure group shows a negative effect, whereas the poor and vulnerable group as well as the middle and upper group show positive effects. The unequal distribution of respondents across regions may reduce the generalizability of the findings. This study enriches digital financial literacy research by highlighting the mediating roles of financial health and personal financial management behavior. Policymakers should promote digital financial education programs that strengthen financial planning, saving, and financial management behavior, especially for lower-middle expenditure groups. Strengthening digital financial literacy and financial management practices may improve financial resilience, reduce financial vulnerability, and support long-term community welfare. This study provides evidence that digital financial literacy influences financial well-being indirectly through financial health and personal financial management behavior while uncovering differences among expenditure-based economic groups through multi-group analysis.

References

Abdallah, L., Alsharif, A., Khalil, E., Mohammad, M., Ebbini, A., Alzboun, N., Turki, M., Ibraheem, S., & Al-hawary, S. (2024). International Journal of Data and Network Science How digital financial literacy impacts financial behavior in Jordanian millennial generation. 8, 117–124. https://doi.org/10.5267/j.ijdns.2023.10.011

Badan Pusat Statistik Provinsi Kepulauan Riau. (2025). Indikator kemiskinan menurut daerah perkotaan/perdesaan. https://kepri.bps.go.id/id/statistics-table/2/NDYwIzI=/indikator-kemiskinan-menurut-daerah-perkotaan-perdesaan.html

Chhillar, N., Sharma, K., & Arora, S. (2025). Exploring the role of digital financial literacy and personal financial behavior in shaping financial stress and well-being in the digital age. Acta Psychologica, 259(105308). https://doi.org/10.1016/J.ACTPSY.2025.105308

Choung, Y., Chatterjee, S., & Pak, T. Y. (2023). Digital financial literacy and financial well-being. Finance Research Letters, 58(PB), 104438. https://doi.org/10.1016/j.frl.2023.104438

Clarence, J., & Pertiwi, D. (2023). Financial Management Behavior Among Students: the Influence of Digital Financial Literacy. International Journal of Financial and Investment Studies (IJFIS), 4(1), 9–16. https://doi.org/10.9744/ijfis.4.1.9-16

Cohen, J. (2013). Statistical Power Analysis for the Behavioral Sciences. Academic Press.

Farida, M. N., Soesatyo, Y., & Aji, T. S. (2021). Influence of Financial Literacy and Use of Financial Technology on Financial Satisfaction through Financial Behavior. International Journal of Education and Literacy Studies, 9(1), 86–95. https://doi.org/http://dx.doi.org/10.7575/aiac.ijels.v.9n.1p.86

Faturohman, T., Megananda, T. B., & Ginting, H. (2024). Improving financial wellbeing in Indonesia: the role of social media as a mediating factor in financial behavior. Cogent Social Sciences, 10(1). https://doi.org/10.1080/23311886.2024.2319374

Gosal, G. G., & Nainggolan, R. (2023). The Influence of Digital Financial Literacy on Indonesian SMEs’ Financial Behavior and Financial Well-Being. International Journal of Professional Business Review, 8(12), e04164. https://doi.org/10.26668/businessreview/2023.v8i12.4164

Hair, J. F., Risher, J. J., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203

Herdjiono, I., Siswantoyo, S., Sukiyono, K., Hutama, P. S., Hakim, A. R., Nggaruaka, T., Awotkay, A. S., & Lola, M. A. (2023). Effect of Financial Behavior, Childhood Consumer Experience, And Financial Wellness on Financial Well-Being. Management:Journal of Sustainable Business and Management Solutions in Emerging Economies. https://doi.org/10.7595/management.fon.2023.0010

J. Hair, J. F., Ortinau, D. J., & Harrison, D. E. (2021). Essentials of Marketing Research.

Jhonson, B., Andriani, R., Noviana, I., & Tamara, D. (2023). Rike Andriani 2) , Irma Noviana 3) , Dewi Tamara 4) 1,2,3) Student of Magister Management. Journal of Business Studies and Management Review (JBSMR), 6(2), 157–168.

Koskelainen, T., Kalmi, P., Scornavacca, E., & Vartiainen, T. (2023). Financial literacy in the digital age—A research agenda. Journal of Consumer Affairs, 57(1), 507–528. https://doi.org/10.1111/joca.12510

Kumar, P., Pillai, R., Kumar, N., & Tabash, M. I. (2023). The interplay of skills, digital financial literacy, capability, and autonomy in financial decision making and well-being. Borsa Istanbul Review, 23(1), 169–183. https://doi.org/10.1016/j.bir.2022.09.012

Kuutol, P. K., Mbonigaba, J., & Garidzirai, R. (2024). Financial Literacy and Financial Well-Being in Rural Ghana: Does Level of Financial Information Consumption Matter? Sustainability (Switzerland), 16(19), 1–19. https://doi.org/10.3390/su16198380

Lone, U. M., & Bhat, S. A. (2024). Impact of financial literacy on financial well-being: a mediational role of financial self-efficacy. Journal of Financial Services Marketing, 29(1), 122–137. https://doi.org/10.1057/s41264-022-00183-8

Lusardi, A., & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy : Theory and Evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5

Manurung, G. M., Hapzi Ali, Manurung, A. H. M., & Lukman Hakim Sangapan. (2025). Kebiasaan Berutang di Era Digital: Kontribusi Budaya Hemat dan Akses Pinjaman Online terhadap Kesehatan Keuangan Rumah Tangga. Journal of Capital Markets and Banking, 13(2), 63–82. https://doi.org/10.63607/jcmb.v13i2

Marheni, D. K., Widiyanti, R., Haryanto, H., & Cruz II, R. B. (2025). Financial Literacy , Financial Parenting , and Riba Awareness : Drivers of BNPL Use Among Muslim Youth. Jurnal Reksa: Rekayasa Keuangan, Syariah Dan Audit, 12(2), 190–214. https://doi.org/10.12928/jreksa.v12i2.13777

Mawadah, B., & Sumiati, S. (2024). The importance of financial health as a mediator of financial stress on financial well-being in young adults. International Journal of Research in Business & Social Science, 13(5), 494–502.

Nurkholik, A. (2023). R Approach in Digital Financial Literacy Influence Subjective Financial Well-Being. Revista Mexicana de Economía y Finanzas, 19(1), 1–20. https://doi.org/10.21919/remef.v19i1.935

Nurlaily, F., Asmoro, P. S., & Aini, E. K. (2022). Digital Financial Literacy anda Personal Financial Health during the COVID-19 Pandemic. Jurnal MEBIS (Manajemen Dan Bisnis), 7(1), 52–56. https://doi.org/10.33005/mebis.v7i1.236

Prieto, A. B. T., Ordoñez, A. C., Rivera, J., & Lee, C. W. (2025). Is Digital Literacy a Moderator Variable in the Relationship Between Financial Literacy, Financial Inclusion, and Financial Well-Being in the Ecuadorian Context? Sustainability (Switzerland), 17(6), 1–26. https://doi.org/10.3390/su17062476

Rahayu, R., Ali, S., Aulia, A., & Hidayah, R. (2022). The Current Digital Financial Literacy and Financial Behavior in Indonesian Millennial Generation. Journal of Accounting and Investment, 23(1), 78–94. https://doi.org/10.18196/jai.v23i1.13205

Sabri, M. F., Anthony, M., Law, S. H., Rahim, H. A., Burhan, N. A. S., & Ithnin, M. (2024). Impact of financial behaviour on financial well-being: evidence among young adults in Malaysia. Journal of Financial Services Marketing, 29(3), 788–807. https://doi.org/https://doi.org/10.1057/s41264-023-00234-8?utm_source=chatgpt.com

Sajuyigbe, A. S., Adegun, E. A., Adeyemi, F., Johnson, A. A., Oladapo, J. T., & Jooda, D. T. (2024). The Interplay of Financial Literacy on the Financial Behavior and Well-being of Young Adults: Evidence from Nigeria. Jurnal Ilmu Ekonomi Terapan, 9(1), 120–136. https://doi.org/10.20473/jiet.v9i1.56411

She, L., Rasiah, R., Turner, J. J., Guptan, V., & Sharif Nia, H. (2021). Psychological beliefs and financial well-being among working adults: the mediating role of financial behaviour. International Journal of Social Economics, 49(2), 190–209. https://doi.org/10.1108/IJSE-07-2021-0389

Tan, T. L., Lu, M. P., & Kosim, Z. (2025). The mediating effect of digital financial inclusion on gender differences in digital financial literacy and financial well-being: Evidence from Malaysian households. Investment Management and Financial Innovations, 22(1), 11–24. https://doi.org/10.21511/imfi.22(1).2025.02

Wahyuni, H., Erwantiningsih, E., & Pudyaningsih, A. R. (2025). Analysis Financial Management Behavior through Financial Literacy: Gen Z’s Preferences Fintech, FoMO, Love of Money. Jurnal Manajemen Dan Kewirausahaan, 13(1), 102–114. https://doi.org/10.26905/jmdk.v13i1.15526

Weida, E. B., Phojanakong, P., Patel, F., & Chilton, M. (2020). Financial health as a measurable social determinant of health. PLoS ONE, 15(5). https://doi.org/10.1371/journal.pone.0233359