The role of entrepreneur's financial sophistication on the nexus of business strategy and sustainability indicators of microenterprises in the National Capital Region

Date of Publication


Document Type


Degree Name

Doctor of Philosophy in Business

Subject Categories



Ramon V. Del Rosario College of Business


Business Management

Thesis Adviser

Arnel Onesimo O. Uy

Defense Panel Chair

Brian C. Gozun

Defense Panel Member

Louie A. Divinagracia
Rodiel C. Ferrer
Junette A. Perez
Rosel Corazon Fonacier


The sector of Philippine microenterprises is considered as an important stimulus of the country's economic growth and is still prevalent in comparison to small and medium enterprises. The study focused solely on microenterprises within the National Capital Region, being the economic hub of the country. A number of literature has studied the business strategy-performance relationship though this study sought to view performance on a wider scale by incorporating other aspects of sustainability indicators based on the Quadruple Bottom Line (QBL, hereafter) framework such as environmental, social and governance, aside from economic indicator. Anchored on the theory of Resource-Based View (RBV), the primary objective of this study is to determine the role of financial sophistication (FS, hereafter), as a human capital resource, and its dimensions on the link between the strategy – sustainability indicator relationship. The data gathered was analyzed using Partial Least Square – Structural Equation Modeling or PLS-SEM and a Focus Group Discussion was conducted to validate the results. Another objective of the study was to assess the moderating effects of gender, age, education and religion, which were analyzed through PLS- Multi Group Analysis or PLS-MGA.
Results showed that FS mediated the effects of every strategy on each of the sustainability indicators. The positive financial behavior also marked as the highest and significant FS dimension, which was closely followed by an analyst-synthesist financial decision-making style. Results also showed that despite financial knowledge has the least path coefficient among the other dimensions topic on basic accounting concepts has a higher effect in comparison to topics related to time value of money and capital markets, respectively. Furthermore, results suggested that the adoption of a prospector strategy fused with the micro-entrepreneur’s FS would have a statistically significant and the highest effect on the individual sustainability indicators, primarily on the economic indicator followed by environmental, social and governance, respectively.
Results also revealed that the effect of FS on the economic sustainability indicator of females is slightly higher than that of males at 90% confidence level. Similarly, the effect of FS on the economic sustainability indicator of micro-entrepreneurs who aged 40 years old and above is also statistically higher than those who are younger, at 99% confidence level.
Taking into account the results, it is recommended that the government should foster its support to the microenterprises, by providing them development programs that will have a strong and well-defined contribution to the improvement of the micro-entrepreneurs financial behavior and financial decision-making style. Considering that financial knowledge is also necessary, the topic on basic accounting is considered the most relevant for microentrepreneurs. It is also recommended for micro-entrepreneurs to adopt a prospector strategy among others, particularly the retail and service sector, being the most represented sectors in this study. It is recommended that future studies be conducted on the moderating effect of education that considers both formal and informal education as well as how an adoption of a reactor strategy affects the survival and success measures of a microenterprise that will involve a longer time frame.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

1 computer disc; 4 3/4 in.


Microfinance--Philippines--Metro Manila; Small business--Philippines--Metro Manila; Businesspeople--Philippines--Metro Manila

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