The Impact of Emotional Intelligence on the Relationship between Financial Literacy and Financial Behavior: The Case of the Lebanese Banking Consumers
Authors:   , DerMesrobian Robert Mesrob 
Published: June 2024

The global financial crisis of 2007 led researchers to study the underlying reasons behind people’s loan/credit disrespecting behaviors which caused tremendous setbacks to major economies. After a handful amount of academic research, banks and other financial institutions admitted their unethical behaviors towards their clients. Being knowledgeable about people’s lack of knowledge in financial principles, they had provided them with novel and tricky financial services which an ordinary client couldn’t comprehend. Since then, many governments such as USA, Canada, Australia and Switzerland started educating their citizens the financial principles which might be of their need to avoid the reoccurrence of a similar global financial crises. Nonetheless, throughout the several years of research in this field, scholars didn’t find a holistic model in which all the variables influencing people’s financial behavior are present. That is why this topic remains worth studying about further. Recently, calls for the need of behavioral finance approach rose in the academic world. Therefore, this study checks the impact of emotional intelligence on the relationship between financial literacy and financial behavior focused on the Lebanese banking consumers. By the literature collected about the three mentioned variables – emotional intelligence, financial literacy, financial behavior – five hypotheses are proposed. Based on these hypotheses, the research model is drawn following Hayes (2013)’s Process Models in which emotional intelligence mediates the relation of financial literacy and financial behavior. Nonetheless, as per the research’s literature, one type of a financial behavior, savings & investment behavior, is treated as a dependent variable. In order to collect the necessary data to test the posed hypotheses, a questionnaire is designed and conducted following the convenient sampling method and using SurveyMonkey online survey platform in December 2018 on Lebanese banking consumers owning either a debit or a credit card. To analyze a total of 187 valid responses, quantitative techniques are used through IBM Spss and its macro, Process Model 1 and Model 74. The results failed to show a significant relation between the dependent variable, financial behavior, and the two independent variables, financial literacy and emotional intelligence. However, significant results exist in the further exploration of the data by moderated mediation in which emotional intelligence moderates the mediation between financial literacy and a type of financial behavior: savings & investments behavior. Some interesting significant results are also attained using the respondents socio-demographics information such as the lack of any significant relation of people’s years of professional experience with the research’s three variables. This research enriches the literature and gives practical insights to policymakers. Being the first of its kind in terms of relating emotional intelligence to financial literacy and financial behavior, it gives itself a unique sense and importance in the field of financial behavioral studies. It also recommends further research on financial behaviors to be focused on savings and investments behaviors. A practical value-added of this research is the recommendation to the concerned policymakers in enhancing both the emotional intelligence and the financial literacy in order to have citizens making good financial decisions.