The Influence of English Language Proficiency on Economic Literacy and Financial Decision-Making: An Empirical Investigation

Abstract

In today’s world, financial decision-making relies on the capability to understand information conveyed in English due to the prevalence of English-language content in financial media, bank documents, investment websites, and digital finance services. The current paper examines the influence of English language proficiency (ELP) and economic literacy on the quality of financial decisions among adult non-native speakers of English in an emerging-market multilingual context. Using a theoretical framework that considers economic literacy as a mediator in the link between ELP and financial decision-making quality and socioeconomic status as a moderator in the same link, the research applies a cross-sectional survey on a sample of 400 participants categorized by their English proficiency band (CEFR A1 – C2) and education level. The results show a statistically significant correlation between ELP and economic literacy (r = 0.71, p < 0.001) and a partial mediation where economic literacy fully mediates the effect of ELP on financial decision-making quality and accounts for about 58% of the overall effect. Participants belonging to the highest ELP band (C1-C2) had a financial decision-making quality 37 points better than participants from the lowest ELP band (A1-A2). The findings have direct implications for financial inclusion policy as financial education materials