Financial Literacy and Entrepreneurial Intention: Attitude Mediation and Tara Bandu's Indigenous Institutional Role in Timor-Leste

Abstract

This study examines the direct and indirect associations between financial literacy and entrepreneurial intention through attitude and tests Tara Bandu as an indigenous institutional boundary condition in Timor-Leste. A sequential exploratory mixed-methods design combined qualitative evidence from five key informants with PLS-SEM analysis of 180 Economics and Business graduates. Financial literacy was positively associated with attitude (β = 0.567, p < 0.001) and entrepreneurial intention (β = 0.256, p < 0.001), while attitude was positively associated with entrepreneurial intention (β = 0.472, p < 0.001). The indirect effect through attitude was significant (β = 0.268, p < 0.001), supporting partial mediation. The Tara Bandu × Financial Literacy interaction was positive and significant (β = 0.363, p < 0.001; f² = 0.273), whereas Tara Bandu’s main effect was nonsignificant. The model explained 55.5% of the variance in entrepreneurial intention and showed positive predictive relevance. However, redundancy analysis of the formative Tara Bandu constructs yielded β = 0.225 (R² = 0.051), below the 0.70 convergent-validity criterion. Accordingly, interpret the moderation finding as preliminary pending measurement refinement and replication.