The effect of financial literacy on financial policies: Evidence from a randomised control experiment in Mozambique

Policy brief Firms

  • Previous research indicates that corporate policies are an important determinant for firm performance. It has also been shown that these polices are related to the education of firms’ managers.
  • This brief evaluates the impact of financial education of managers on firm policies and performance.
  • The authors find that managers adjust financial policies after having attended a programme on “Corporate Finance and Risk Management”.
  • The results suggest that relatively small interventions, such as financial education, improve financial practices and decision-making and may ultimately affect economic development.
  • The authors suggest policymakers establish or support financial literacy programmes for executives.