Word-Of-Mouth, Trust, and Perceived Risk in Online Shopping: An Extension of the Technology Acceptance Model

Word-Of-Mouth, Trust, and Perceived Risk in Online Shopping: An Extension of the Technology Acceptance Model

Farrah Zeba (IBS Hyderabad, Hyderabad, India) and Shirshendu Ganguli (T A PAI Management Institute, Manipal, India)
DOI: 10.4018/IJISSS.2016100102
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Abstract

This paper aims to understand the role of word-of-mouth, trust and perceived risk in extended technology acceptance model on online purchase intention. Firstly, EFA was used to test the dimensionality of these constructs. Next the reliability and validity of these constructs have been established using CFA in AMOS 16.0. Then the hypotheses were tested using SEM in AMOS 16.0. It was found that word-of-mouth has a positive and significant impact on online purchase intention whereas perceived risk has a negative and significant impact on online purchase intention. It was also found that word-of-mouth has a positive and significant impact on trust and trust has negative and significant impact perceived risk. Word-of-mouth, trust and perceived risk should be viewed as the levers in the adoption process of online shopping in the extended technology acceptance model. Examining the role of these three constructs on online purchase intention explicated the dual process of perceived risk acting as an inhibitor whereas word-of-mouth acting as an enabler.
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Literature Review

Technology Acceptance Model

The idiosyncrasy of the online environment has been explained by Loiacono, Watson, &Goodhue (2002) as the interaction of ‘information system’ as well as ‘marketing’ when accessing a website. Parasuraman, Zeithaml, & Malhotra (2005) also concurred that customer evaluation of new technology is a distinct process. The Theory of Reasoned Action (TRA) has frequently been employed to illustrate how an individual form an intention to act based on his evaluation of the consequences of that action (Fishbein, 1979). Davis (1989) applied TRA in in the area of ‘using computer technologies’ and developed TAM. This model suggests that two constructs or belief, ‘perceived usefulness’ and ‘perceived ease of use’, are affecting the online purchase intention (Kesharwani & Tripathy, 2012). Perceived usefulness is the belief of a user on the performance of the new technology (Davis, 1989). Perceived ease of use is the belief that the new technology is easy to use (Davis, 1989).

Several studies (Davis, 1986; 1989) have shown that perceived ease of use influences perceived usefulness. That is ease of use of technology increases usefulness of the technology. Phillips, Calantone, &Lee (1994) and Wang, Wang, Lin, & Tang (2003)studied this relationship in other contexts like internet banking and had shown that perceived ease of use has a positive and significant effect on perceived usefulness.

Loiacono et al. (2002) extended the TAM and developed Webqual scale (an instrument to evaluate the website) on the ground that website sometimes goes beyond utilitarian aspects (i.e. ease of use and usefulness). In this they extended the TAM by including entertainment as the hedonic aspects on the ground that website is driven by some additional factors beyond perceived ease of use and perceived usefulness (Pine & Gilmore, 1998). Hoffman & Novak (1996) and Singh & Dalal (1999) also concurred that websites have some entertainment value that is not easily captured by ease of use and usefulness.

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