Causal Factors Affecting Financial Risk Management of Young Entrepreneurs During the Thai Economic Recession

Abstract

This research aimed to (1) study the level of financial risk management of young entrepreneurs during the Thai economic recession and (2) analyze the causal factors affecting financial risk management. The sample consisted of 300 young entrepreneurs operating small and medium-sized businesses. The instrument used was a questionnaire that was subjectively validated by experts for content validity (IOC ≥ .50) and reliability (Cronbach's alpha ≥ .70). Data were analyzed using descriptive statistics, confirmatory factor analysis (CFA), and structural equation analysis (SEM). The descriptive results revealed that respondents expressed the highest level of agreement on all factors. The results of the measurement model testing showed acceptable fit indices (CFI ≥ .95, RMSEA ≤ .07). The causal analysis of financial risk management revealed that entrepreneurial factors positively influenced organizational (β = .74), market and ecosystem (β = .54), and institutional and policy (β = .78) factors. Meanwhile, market and ecosystem factors had the highest direct influence on financial risk management (β = .44), followed by organizational factors (β = .30), and institutional and policy factors (β = .14). This reflects that market ecosystem readiness and organizational structure strength are the main mechanisms for reducing financial risk among young entrepreneurs, while entrepreneurial factors act as an indirect driver through these two factors. The results indicate that developing entrepreneurial potential, coupled with improving internal management systems and linking market networks, are important strategies to enhance the financial resilience of young businesses during the economic downturn. The research recommends that the government design measures that are more accessible and consistent with the SME context. 

Keywords: Risk Management, Finance, Young Entrepreneurs, Economic Recession