Financial literacy, financial bargaining power and women's economic empowerment in the Mekong Delta, Vietnam

Purpose This study investigates how financial literacy (FL) affects women's economic empowerment (WEE) through the mediating role of financial bargaining power (FBP) within households in Vietnam's Mekong Delta, addressing a gap in understanding the transmission mechanism between FL and WEE in a rural, agrarian context. Design/methodology/approach Integrating Nash bargaining theory, Kabeer (1999) empowerment framework, and Lusardi and Mitchell's (2014) financial literacy theory, the study collected survey data from 450 women across the Mekong Delta. A two-stage generalized additive model (GAM) was employed to capture nonlinear relationships among FL, FBP, and WEE, supplemented by qualitative interviews to illuminate underlying mechanisms. Findings FL exerts a significant but nonlinear effect on FBP, with gains diminishing beyond certain thresholds due to entrenched gender norms and institutional constraints. FBP is the primary transmission channel from FL to WEE: once FBP is controlled for, the direct effect of FL becomes statistically insignificant, confirming that financial knowledge alone is insufficient without corresponding decision-making authority. Women's income contribution, employment status, and education level are consistent predictors of WEE. Qualitative evidence further reveals that patriarchal norms and psychological pressures explain the observed effects. Research limitations/implications Findings are specific to the Mekong Delta and the use of cross-sectional data limits causal inference. Future longitudinal research should examine how cultural norms and policy interventions moderate the FL–FBP–WEE relationship. Originality/value This paper formally integrates FL, FBP, and WEE within a Nash bargaining framework and identifies the nonlinear transmission mechanism between them, offering novel insights from an informal-finance-dominant rural economy.