What Drives Financial Stress in Indonesia?
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Abstract
This study examines the determinants of financial stress and its impact on financial behavior in Indonesia’s evolving digital financial ecosystem. Drawing on the Conservation of Resources (COR) Theory and the Theory of Planned Behavior (TPB), it examines how short-term financial pressure, future financial expectations, and digital knowledge influence financial stress and financial behavior in Indonesia. Using survey data analyzed with Partial Least Squares Structural Equation Modeling (PLS-SEM), the results show that current money management stress is the strongest driver of financial stress, highlighting the importance of short-term financial pressure. Expected future financial security helps reduce stress, but its effect is relatively weak, while digital knowledge does not significantly reduce financial stress. Financial stress has been found to positively affect financial behavior, suggesting that under certain conditions, it can encourage more careful and proactive financial management. Financial stress partially mediates the relationship between short-term financial pressure and financial behavior, whereas digital knowledge does not moderate this relationship. Overall, this study shows that financial stress is not always detrimental but can also play a constructive role as a catalyst for adaptive behavior. The findings offer insights into financial behavior in emerging digital economies and provide implications for financial education and policy design.
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