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The moderating effects of financial broad-scope trust on consumer knowledge, cognitive effort, and financial healthiness: Broad-scope trust and consumer financial behavior
Abstract
Substantial research results suggest the global financial crisis has negatively affected consumers' trust in financial service providers. Notably, trust not only relates to consumer trust in individual companies but also relates to the broader business context in which consumers may plan and carry out their financial behavior. This latter form of trust can be referred to as "broad-scope" trust (BST). BST is especially important in a society context because lack of BST may reduce financial market dynamism, competition, and productivity. Consequently, financial service providers assume an important social responsibility in order to develop BST. Unfortunately, not much is known about the interplay between BST and consumer financial behavior. Based on two surveys comprising 1155 bank consumers and 756 mutual fund investors, respectively, this study investigates the moderating influence of BST on relations between knowledge, cognitive effort, and financial healthiness and also examines the direct influence of BST on cognitive effort and financial healthiness. The results indicate that BST negatively moderates relations between knowledge and financial healthiness and between cognitive effort and financial healthiness. In addition, it is demonstrated that BST negatively influences cognitive effort and positively influences financial healthiness. Our results demonstrate the importance of developing BST as it may ease the burdens put on consumers' financial knowledge and processing capabilities, which in turn may facilitate their financial well-being.
... After exposure of a product-harm crisis, the negative publicity directly leads to the trust crisis [19]. Trust not only includes the trust in enterprises but also in the broader context of the business environment, which is broad-scope trust [16,[20][21][22]. The previous research of product-harm crisis on trust mainly focus on the narrow-scope trust (e.g. ...
... For example, in China in 2012, the decyl butyl phthalate (DBP) in Baijiu exceeded the standard involving many Baijiu enterprises, which caused a group product-harm crisis in the Baijiu industry [14]. Compared with a single enterprise product-harm crisis, a group product-harm crisis not only increases consumers' perceived risk of industrial products, but also affects consumers' trust in the establishment and maintenance of a specific social background related to organizations or individuals [20] including trust in the industry [16,21] and trust in government regulation [17]. Once consumers and the public lose trust in an industry and regulatory system, it will lead to a long-term downturn and gradual shrinkage of the whole industry [15]. ...
... In correspondence with trust-related research [e.g. 16,20,21], it is believed that trust not only included narrow-scope trust, but also broad-scope trust. Specifically, the narrow-scope trust generally refers to consumers' trust in enterprises [26], and the broad-scope trust is the consumers' trust in the specific social background of establishing and maintaining the relationship with organizations [20], such as trust in industry [16,21] and institution [22] or system [20]. ...
The group product-harm crisis has much greater and longer negative impact, and its governance has become an important issue. To address this issue, this study proposed a new construct: industry governance. On the basis of clarifying the dimensions and measurements of industry governance, this study constructed a reflective–formative hierarchical model and collected data through a questionnaire. Utilizing convenience sampling, 329 valid samples at the University in Wuhan, China collected by survey were used to verify the hypotheses. With the help of Smart PLS 3.0, this study finds that the industry governance has a significant and positive impact on consumer's trust (enterprise trust, industry trust and government trust) after the group product-harm crisis. Industry governance plays an important role in the governance of group product-harm crisis. This study is the first time to explore the structure and measurement of industry governance, and verifies the impact of industry governance on group product-harm crisis, which enriches governance theory, and perfects product-harm crisis theory, providing a new direction and guidance for managers to better manage product-harm crisis.
... individual banks in general (Hansen, 2012(Hansen, , 2017van Esterik-Plasmeijer and van Raaij, 2017). This has proven especially true in the Israeli case, and serves as the basis for the research question-How does the perception of the banking system and the banks affect bankspecific trust? ...
... Arguably, the institutional framework "strongly contributes to an analytically profound understanding of the functioning of social mechanisms such as trust" (Bachmann, 2003, p. 10). According to institutional theory, trust in the banking system leads to trust in banks (Hansen, 2012(Hansen, , 2017van Esterik-Plasmeijer and van Raaij, 2017). ...
... To date, few studies have integrated system and bank perception into a single model to discern the causes of customer trust in his or her bank (i.e. Ang and Cummings, 1997;Hansen, 2012Hansen, , 2017van Esterik-Plasmeijer and van Raaij, 2017). The present study aims to help fill this crucial gap through mixed methods study. ...
Purpose
This study identifies predictors of customers' trust in banks at both the banking system level and toward individual banks. A mixed methods technique is utilized which combines both customers' and bankers' perspectives.
Design/methodology/approach
The study utilizes mixed methods, including a questionnaire survey of 1017 bank customers from retail banks, together with qualitative research derived from ten interviews with Israeli bankers.
Findings
The quantitative study shows that transparency is mediated between perception of price fairness and integrity of the banking system level and trust toward individual banks. Customer satisfaction was found to be a mediator between integrity of the banking system and trust in the individual bank. Qualitative analysis of interviews with bankers yielded six themes: integrity, transparency, price perception, service, bank image and regulation.
Research limitations/implications
This study adumbrates specific aspects of the banking system and of individual banks. Cultural differences pertaining to trust might validate the findings when the study is replicated in other countries.
Originality/value
Since customers are universally considered as key bank stakeholders, insights are provided concerning determinants at the banking system level and toward individual banks, both crucial to explain trust. From both managerial and policymaking perspectives, this study contains valuable practical implications.
... Trust has experienced a considerable increase of scholarly interest across different service industries (Agariya & Singh, 2011;Bachmann & Zaheer, 2006) such as finance (Chiao, Chiu, & Guan, 2008;Gillespie & Hurley, 2013;Hansen, 2017;Kosiba, Boateng, Okoe, & Hinson, 2018;Nguyen, 2016;Wang, Ngamsiriudom, & Hsieh, 2015), tourism and hospitality (Altinay & Taheri, 2019;DeWitt, Nguyen, & Marshall, 2008;Gregori, Daniele, & Altinay, 2014;Nunkoo & Smith, 2015;Pereira et al., 2016;Rather, Hollebeek, & Islam, 2019;Tussyadiah & Park, 2018;Wang, Law, Hung, & Guillet, 2014), healthcare (Calnan & Rowe, 2006;Dean, Moss, Mccarthy, & Armstrong, 2017;Murray & McCrone, 2014;Nienaber & Schewe, 2014;Peters & Bilton, 2018;Şengün & Wasti, 2011;Skinner, Saunders, & Duckett, 2004), media (Filieri, Alguezaui, & McLeay, 2015;Jackob, 2010;Lee, 2010), technology (Barua, Aimin, & Hongyi, 2018;Jeon, Ali, & Lee, 2019;McKnight, 2005), and the like. This surge of interest has paralleled the shift of focus from transactional-to relationship-based service orientation, scholars adopting differing conceptualisations of trust, their surge of interest. ...
... Correspondingly, lack of trust in the broader context can negatively influence trust in individual actors. When customer trust in the financial services industry was severely damaged by the global financial crises, and also by erupting scandals of misconduct (Gounaris & Prout, 2009;Hansen, 2014Hansen, , 2017, trust in individual finance firms and financial advisers also diminished (Hansen, 2017;Sapienza & Zingales, 2012). Therefore, (re)building customer trust in financial organisations and its representatives does not merely require interpersonal trust repair, but also necessitates restoring trust in the broader context by initiating embedded institutional practices and government policies (Gounaris & Prout, 2009;Nienaber, Hofeditz, & Searle, 2014). ...
... Correspondingly, lack of trust in the broader context can negatively influence trust in individual actors. When customer trust in the financial services industry was severely damaged by the global financial crises, and also by erupting scandals of misconduct (Gounaris & Prout, 2009;Hansen, 2014Hansen, , 2017, trust in individual finance firms and financial advisers also diminished (Hansen, 2017;Sapienza & Zingales, 2012). Therefore, (re)building customer trust in financial organisations and its representatives does not merely require interpersonal trust repair, but also necessitates restoring trust in the broader context by initiating embedded institutional practices and government policies (Gounaris & Prout, 2009;Nienaber, Hofeditz, & Searle, 2014). ...
Research has revealed service industries’ benefits from customer trust including positive effects on commitment, loyalty, sales effectiveness, and collaborative, cooperative, and successful exchange relationships. Yet, despite the relevance of customer trust, gaps remain in our understanding regarding its implications and effective management. Commencing with a consideration of the theoretical foundations of trust, this theoretical review paper highlights the key trust theories synthesising service industries and management literatures on trust, its levels, development, violations, and repair. Drawing on this, recommendations are offered for scholars regarding future research as well as for service firms and their representatives regarding enabling customer trust.
... In this vein, cognitive effort on the part of the consumer is likely to cause a drawback in relation to their drive in actively engaging with retail brands on social media, given the time constraints on the part of the consumer. In this study, cognitive effort is defined as the amount of energy, resources, time and force put into a behaviour or practice (Hansen, 2017;Söderlund and Sagfossen, 2017). ...
... While more consumer motivations in participating in SBE practices could lead to response outcome behaviours, this may be driven by the level of effort required by the consumer (Hansen, 2017). ...
... Following Hansen (2017), this study considers cognitive effort as an outcome approach, suggesting that the amount of cognitive effort expended could reflect on the quality of participation in SBE activities, suggesting that the higher the effort, the quality of the outcome and its associated benefits. Yeo and Neal (2008) note that distal and proximal processes influence cognitive effort allocation decisions. ...
2 Abstract Purpose-This study examines the influence of autonomous and controlled motivational regulations in driving consumer participation in social brand engagement (SBE) practices. In addition, the moderating effects of cognitive effort and consumer demographic variables (age and gender) are examined.
Methodology-The proposed model is tested through a quantitative survey design. 832 retail consumers were conveniently interviewed using online questionnaire. The model estimation was done through structural equation modelling with AMOS 23.0.
Findings-The findings indicate that intrinsic, integrated, introjected and external motivational regulations significantly influence consumer participation in SBE activities, whereas identified regulation does not. Further, while age and gender presented mixed interaction effects on the paths examined, cognitive effort does not moderate the influence of autonomous and controlled motivational regulations on SBE participation.
Research limitations/implications-This study employed a cross-sectional survey to explore consumer motivation and cognitive effort in SBE practices. As an exploratory study, the findings may be limited and not conclusive, which could limit the generalisation of the results reported.
Practical implications-The paper demonstrates a need for retailing managers to understand customers' varying intentions or needs in participating in online social brand engagement activities As a result, retail managers need to adopt social media strategies that could elicit interest and curiosity on the part of the customer to excite them to participate in the brand social interactions.
Originality-This research contributes to the conceptual understanding of social brand engagement through the application of self-determination theory, and contends that cognitive effort does not moderate consumer participation in SBE practices. Also, the mixed findings resulting from the moderation test of age and gender shed light on specific types of regulated motivations that are either moderated or not in relation to these demographic variables.
... The SLR finds that authors have treated financial satisfaction interchangeably with financial happiness and financial wellness in the studies without losing any conceptual rigor. However, some studies have used a similar construct, financial healthiness, to conceptualize FWB differently (Hansen, 2017;Malone, Stewart, Wilson, & Korsching, 2010;Sivaramakrishnan, Srivastava, & Rastogi, 2017). Hansen (2017, p. 6) defines financial healthiness as "the extent to which the customer exhibits positive financial behaviors, such as paying their credit card bills in full each month and avoiding the financial troubles caused by not having enough money." ...
... This consumer co-production behavior will increase the consumers' credit score and reduce the financial stress that will, in turn, increase financial healthiness. Financial stress is triggered by a lack of trust in business activities in general and financial activities in the marketplace in particular (Hansen, 2017). ...
Subjective Financial Well‐being (FWB) research has gained considerable interest from both academics and practitioners recently. This research area focuses on the consumer’s self‐assessment of his/her disposition, belief, attitude, and behavior concerning money management, spending, savings, and investment. The authors used a systematic literature review (SLR) process, which is a step‐by‐step process‐driven methodology, to find 128 articles published between 1978 and 2020 in marketing and related consumer studies fields. By critically examining the published studies, the paper proposes an organizing framework to identify important research gaps and suggest future research directions. The existing studies highlight (a) macro‐level factors determining the consumer’s FWB, (b) bank information transparency and ethical selling, (c) consumer co‐production behavior, (d) consumer financial literacy and how it relates to FWB, (e) financial inclusion, (f) materialism, personality, spending self‐control, and FWB, (g) multicountry research, and (h) the outcomes or consequences of FWB. Further research directions emphasize the need for research on (a) young consumers and their FWB and (b) role of marketers in maintaining FWB of consumers. The organizing framework offers actionable insights for banks, other financial institutions (FIs), businesses, third‐party organizations (i.e., financial literacy service providers), and public policy makers to increase the subjective FWB of consumers.
... This study posits that consumer's knowledge of a process or brand is likely to influence their participation in social media brand engagement practices. This assertion is hinged on previous studies contending that brand knowledge could encourage consumers to search and gain new product information (Brucks, Hansen, 2017). The information-processing paradigm presents that consumers' exposure to a stimulus could elicit responses and contribute to the formation of prior knowledge (Brucks, 1985). ...
... The data was first screened using SPSS 23.0. Following the slight modifications made in the scale items, an exploratory factor analysis (EFA) was conducted using the principal component analysis and Varimax rotation Hansen (2017). The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy was 0.883, exceeding the cut-off value of 0.6 with a p-value < .0001 ...
Purpose
The purpose of this paper is to deepen the understanding on social media brand engagement (SMBE) practices by exploring the impact of consumer brand knowledge, perceived social pressure, perceived social relatedness (PSR) and the role of brand trust.
Design/methodology/approach
A model is proposed to suggest the influence of consumer-level antecedents and moderators of SMBE. Following a survey design approach, data collected from 687 respondents on Facebook are examined through structural equation modelling using AMOS 23.0.
Findings
The findings reveal significant relationship between the examined antecedents (brand knowledge, perceived social pressure and brand trust) and SMBE. Examination of the moderation role of PSR revealed significant interaction effects on the relationship between brand knowledge and SMBE, as well as perceived social pressure and SMBE. The findings also suggest a lack of interaction effect of PSR on the relationship between brand trust and SMBE.
Research limitations/implications
This research provides empirical evidence in support of understanding SMBE practices by testing theoretically grounded hypotheses. The study focussed on technologically savvy respondents and only Facebook users in Ghana, which could limit the generalisation of the findings reported.
Practical implications
This study illustrates a need for managers to integrate multi-communication channels to enhance brand interactions and engagements. Firms must also adopt strategies that would enhance the sharing of interesting information about their brands on their social media platforms to attract others through customer networks.
Originality/value
The conceptualization of SMBE in this study zooms out our understanding of online SMBE by examining pertinent variables that drive or moderate consumer participation in SMBE activities. The integration of these variables brings out new empirical understanding and extends our knowledge on SMBE.
... Through the global financial crisis in 2009, consumer protection must be needed regarding financial decision-making and behaviour (Hansen, 2017). Better financial behaviour becomes essential to improve the quality of life because consumers can manage their own lives and pursue happiness based on healthy financial flows. ...
This study aims to determine whether Financial Attitude is able to mediate the relationship between Islamic Financial Knowledge, Internal Locus of Control and Islamic Financial Behavior in Islamic Bank Millennial Consumers. This study uses a quantitative approach with statistical tests, the data collected was analyzed by the method of Structural Equation Modeling (SEM) using AMOS software. SEM analysis includes path analysis, confirmatory factor analysis (CFA), causal modeling with latent variables and multiple regression analysis of variance (Hair et al., 2010). This study uses four variables (see Figure 1) consisting of two exogenous variables (Islamic Financial Knowledge (IFK) and Internal Locus of Control (ILOC)), there is one mediating variable (Financial Attitude (FINA)), and one endogenous variable ( Islamic Financial Behavior (IFB)). The hypothesis test shows that the financial attitude possessed by the millennial generation is able to mediate the relationship between Islamic financial knowledge (Islamic financial knowledge) and self-control (internal locus of control) on Islamic financial behavior (Islamic financial behavior). This means that the millennial generation's attitude towards finance reflects knowledge and self-control so that they are able to demonstrate financial behavior in accordance with Islamic teachings (Islamic Finance). Keywords: Knowledge of Islamic Finance, Internal Locus of Control, Financial Attitude, Islamic Financial Behavior.
... 7 Trust may also mediate relationships. Based on two surveys comprising 1,155 bank consumers and 756 mutual fund investors, Hansen (2017), for instance, reports that broad-scope trust negatively moderates relations between consumers' knowledge and financial healthiness and between their cognitive effort and financial healthiness. 8 On a more optimistic note, research has shown that self-reported measures of financial knowledge are closely linked to actual financial knowledge. ...
Trust in financial institutions is widely considered important. However, a clear overview of studies on the drivers of trust is missing. We intend to fill this gap in the literature. After discussing why trust in financial institutions is important, we turn to its measurement, where we distinguish between trust in one's own institution and trust in institutions in general (narrow-scope and broad-scope trust), and discuss how these measures differ from generalized trust (i.e. trust in other people with whom there is no direct relationship). Finally, we survey the determinants of trust in financial institutions and discuss a wide range of drivers. First, trust in financial institutions depends on the economic situation: it behaves procyclically and is negatively affected by financial crises. Second, the behavior of financial institutions matters: prudent conduct, the provision of good services and financial health have a positive effect on trust. Third, although consumer characteristics also relate to trust, many of these relationships are context-dependent. Fourth, there is a positive association between narrow-scope trust on the one hand and broad-scope trust and generalized trust on the other. Last, policy measures and supervisory actions can help prevent loss of trust.
... Parker et al. (2012) observaron que decisiones financieras sobre inversión y ahorro para la jubilación son cada vez más complejas y requieren más conocimientos financieros para un correcto uso y obtención de los objetivos previstos. Hansen (2017) observó que los resultados originados por la crisis financiera a nivel mundial afectaban de forma negativa a la confianza de los inversores y, por lo tanto, afectaba a su bienestar financiero. 9. Riesgo: el papel del riesgo en las inversiones es un factor importante para la toma de decisiones, en este tema se exponen estudios relacionados con la gestión de esta variable y, los resultados obtenidos y su relación con el conocimiento o Educación Financiera. ...
This study aims to analyze the intellectual structure of research in Financial Education from bibliometric techniques from 1970 to 2020. To carry out this analysis, the SciMAT software has been used with which the performance and scientific production have been extracted, as well as the most important topics within the area of Financial Education through the analysis of the co-occurrence of keywords. The results obtained show how Financial Education is a research area with great potential and growth expectations, finding that the most prominent topics within this research area are risk management, user savings and spending, and use of money. This study contributes to the analysis of Financial Education in different fields, helping to understand its intellectual structure.
Resumen
El presente estudio se propone analizar la estructura intelectual de la investigación en Educación Financiera a partir de técnicas bibliométricas desde 1970 hasta 2020. Para llevar a cabo este análisis se ha utilizado el software SciMAT con el que se ha extraído el rendimiento y la producción científica, así como los temas más importantes dentro del área de Educación Financiera mediante el análisis de co-ocurrencia de palabras clave. Los resultados obtenidos muestran como la Educación Financiera es un área de investigación con un gran potencial y expectativas de crecimiento, encontrándose que los temas más destacados dentro de esta área de investigación son la gestión del riesgo, el ahorro y el gasto de los usuarios y la utilización del dinero. Este estudio contribuye al análisis de la Educación Financiera en distintos campos ayudando a una comprensión de su estructura intelectual.
... The locus of control is the degree to which people believe that they have control over the outcome of events in their lives, as opposed to external forces beyond their control. The consumers' need for control positively influences their purchase decision making [52]. The locus of control could influence the consumer's purchase intentions, with more internal consumers being more organised and purposive in the act of shopping [53][54][55]. ...
The Internet as a shopping and purchasing medium has become an extensively researched topic. Augmented realty, in particular, allows consumers to explore their options and make personalised changes while shopping online. Our study aims to analyse the symmetry between the attitudes towards using the traditional electronic online shopping and the electronic commerce that uses augmented reality. We also investigate the effects of personality traits and the attitudes towards the Internet on the two electronic commerce forms. Our results show that the buying intention in online shopping is significantly higher in the case of augmented reality. Our results also reveal associations between personality traits and online buying behaviours, i.e., neuroticism and the openness to experiences being associated with the willingness to buy online. On the other hand, personality traits are proved to predict buying impulsiveness, the highest weight being represented by low emotional stability and high external locus of control. Further research should also include other dimensions, such as the perceived risks associated with online purchasing, self-efficacy or anxiety towards technology.
... Interdisciplinary trust literature maintains that institutional trust influences customers' trusting belief. Institutional processes and structures act as authoritative guidelines for social behavior and thus can explain trust (Hansen, 2017). Institutional trust assumes that situations or the environmental setting influence trust in two ways: ...
Purpose
In banking services, trust is crucial to any relational exchange situation. Using the example of Israeli banks, the main research question driving this paper is – What are the reasons for trusting or not trusting banks? To date, few studies have examined the reasons of ongoing low trust during so-called “normal times”.
Design/methodology/approach
This paper is unique in approaching the study of customer trust in banks through qualitative analysis by using the interdisciplinary trust approach.
Findings
The results offer important insights regarding situational normality, structural assurance and customers’ tendencies to trust the bank. The insights about trust derived from this complicated relationship between customers and banks reveals that customers grow dissatisfied and their level of trust consequently decreases when they perceive an imbalance in the exchange relationship with their bank.
Originality/value
This study provides novel insights into hidden attitudes and feelings behind each component of trust beliefs in the bank–customer trust relationship through interdisciplinary trust perspective.
... 7 Trust may also mediate relationships. Based on two surveys comprising 1,155 bank consumers and 756 mutual fund investors, Hansen (2017), for instance, reports that broad-scope trust negatively moderates relations between consumers' knowledge and financial healthiness and between their cognitive effort and financial healthiness. 8 On a more optimistic note, research has shown that self-reported measures of financial knowledge are closely linked to actual financial knowledge. ...
... 7 Trust may also mediate relationships. Based on two surveys comprising 1,155 bank consumers and 756 mutual fund investors, Hansen (2017), for instance, reports that broad-scope trust negatively moderates relations between consumers' knowledge and financial healthiness and between their cognitive effort and financial healthiness. 8 On a more optimistic note, research has shown that self-reported measures of financial knowledge are closely linked to actual financial knowledge. ...
... Accessed April 20, 2017. 3 According to Hansen (2017), trust is negatively correlated with cognitive effort. over several decades. ...
Whilst there are many models discussing the mechanics of financial crises, the notion of predation seems to be insufficiently taken into consideration as one of the explanatory behavioral factors, although it would enrich the understanding of dysfunctional financial markets. This paper provides a stylized model for disruptive and toxic economic behaviors in the context of predatory markets like the subprime crisis of 2007–2009. In this context, we investigate why consumers and sellers buy products they know to be toxic. Conventional economic models contain classical tenets that assume that consumers are rational and search for utility maximization; however, these models cannot straightforwardly explain the behaviors consumers and sellers adopted during times of financial crises, known as “exuberantly irrational”. Hence, we use and expand on a predator-prey perspective that endeavors to capture such behaviors more effectively while showing that four market variables must be considered together over time – consumers, suppliers, toxic products and regulations. Our analysis shows that during the GFC, consumers and lenders as well as regulators embraced whole-heartedly, and contrary to common economic sense, the development and marketing of toxic products. Their behaviors were actually quite rational in the context of a poisoned market. Such observation could assist in drafting regulations.
The determinants of household debt have been the subject of many scientific studies where income was identified as the key factor influencing debt. This is because income determines creditworthiness in banks. At the same time, behavioural finance research highlights the importance of subjective factors for individuals’ financial decision-making. The aim of this paper is to verify the influence of the subjective assessment of households’ financial situation (also known as financial wellbeing) on their debt. The research was based on secondary data for the years 2009–2020 published by Statistics Poland and the National Bank of Poland. The study used linear regression, where time series related to debt were the dependent variables, and time series related to income and financial wellbeing were the explaining variables. The study confirmed that taking into account the subjective assessment of households’ financial situation allows more effective modelling of household debt than disposable income solely. The results also demonstrated that individuals assessing their financial situation as very good are more likely to get into debt than those who believe their material status to be average. Additionally, as the assessment of financial wellbeing improves, household debt in foreign currencies decreases.
Cet article rend compte du rôle de plus en plus important que joue la confiance dans l’explication du volume et de la structure de l’épargne des ménages. Il s’articule autour de trois littératures qui s’ignorent : la macroéconomie de l’épargne, l’économie des institutions et l’économie de la confiance. Le concept de confiance est le mieux placé pour unifier ces trois pôles de la littérature sur les déterminants de l’épargne. Elle introduit dans l’explication de la dynamique une dimension éminemment subjective qui peut expliquer, d’une part, pourquoi les tests empiriques ont des résultats plutôt ambigus et confirmer d’autre part qu’en sciences sociales ce ne sont pas les faits objectifs, bruts qui sont importants, mais les faits perçus à travers les croyances des agents. L’article examine la relation théorique entre, d’un côté, la confiance en soi, la confiance dans les autres, la confiance dans les institutions, et de l’autre le comportement d’épargne. L’examen des articles empiriques prenant en compte cette dimension subjective fournit des résultats prometteurs. Les individus confient leur épargne sur la base des représentations qu’ils ont d’eux-mêmes, des autres et des institutions. Plus ils ont confiance, plus ils acceptent d’épargner dans des institutions financières et plus ils acceptent de prendre des risques avec leurs placements. Cet article se conclut par une discussion sur les conséquences que ces résultats ont sur la recherche en science économique et sur la détermination des politiques publiques susceptibles d’augmenter le volume d’épargne et de rendre sa structure plus efficiente. JEL : D14
Purpose
This study aims at investigating the differential impact of different CSR communication strategies on consumers' brand trust and consequent attitudes and behaviors in the credence goods market.
Design/methodology/approach
An experimental laboratory study was conducted to collect data from graduate students ( n = 414) from two Chinese universities. Structural equation modeling was used to test the hypothesized model.
Findings
The results show that a dialogical communication strategy, compared to a monological communication strategy, is significantly more effective in increasing consumers' brand trust for credence goods as well as their willingness-to-buy and positive word-of-mouth. The results also confirm the mediating effect of CSR knowledge and the moderating effect of broad-scope trust on the relationship between CSR communication strategies and brand trust.
Practical implications
This study implies that in order to promote consumer trust and supportive behaviors toward brands, managers of companies in credence goods market should consider the increased use of various dialogical CSR communication strategies.
Originality/value
The study is one of the first to verify the impact of dialogical vs monological CSR communication strategies on consumers of credence goods.
Purpose
In the uncertainty of the global economy, many young adults have financial independence from their parents and are making financial decisions in a difficult financial environment. This study aims to focus on debt management behavior for young adult consumers.
Design/methodology/approach
The data is from the 2010 National Longitudinal Survey of Youth 1997 (NLSY97). The NLSY97 includes information on US young consumers’ financial, demographic and attitudinal characteristics, as well as various socio-economic conditions, making it convenient to explore the relationships between financial behavior and psychology variables. In the 2010 survey, 4,110 young consumers were interviewed.
Findings
The results show that self-determination and motivation alone cannot bring about a direct change in financial behavior without the mediation of financial psychology. Therefore, consumer finance research should consider debt-management behavior by presenting different strategies than those currently used.
Originality/value
In the self-determination theory, emphasizes the internal grounds for distinguishing self-regulation from personality development and behavior. Specially, this paper deals with the financial behavior of young adult consumers through self-determination theory.
The public’s financial security is vital to economic stability, with policy and practice efforts focused on developing financial literacy to reduce financial vulnerability. However, this approach fails to fully consider the emotional factors that influence the financial decision-making process. This study examines how emotions shape these decisions, drawing on the concept of ‘muddling through’ to understand the complex process to be navigated. Data are drawn from 78 in-depth interviews with consumers who were financially ‘struggling and squeezed’. ‘Integral’ and ‘incidental’ emotions were influential both in assisting the decision-making process and in introducing biases that could lead to harm. Consumers were able to rationalize their decisions, even though they might not be economically optimal in the longer term. Muddling through theory is extended by explaining the role of emotions within it. New insights into the interaction between emotions that are ‘integral’ or ‘incidental’ to decision-making lead to policy and practice recommendations.
Purpose
This study aims to investigate the relationship between institutional trust, dispositional trust and trust in takaful products with the mediating effect of service-provider expertise.
Design/methodology/approach
The data for this study were collected from 385 takaful policyholders from Lahore and Islamabad, Pakistan. The relationship is estimated with PLS-SEM using the bias-corrected bootstrapping method.
Findings
For paths 1 and 2, the results suggest a significant positive relationship between institutional trust, dispositional trust, service provider expertise and trust in takaful products. Results for the bias-corrected bootstrapping model revealed that service provider expertise mediates the relationship between intuitional trust, dispositional trust and trust in takaful products.
Research limitations/implications
Data were collected from provincial and federal capital cities of Pakistan where institutional setting is much much as compared to other cities
Practical implications
From the managerial perspective, the dispositional trust would help them in choosing appropriate marketing strategy, segmentation, new product development, targeting and positioning to increase penetration. At the same time, takaful companies need to improve their expertise, knowledge and information-sharing mechanism for fostering overall consumer perception of trust in takaful products.
Social implications
Insurance, conventional or Islamic, is meant to transfer risk to the third party. Regulators need to improve overall institutional factors because improvement will strengthen the trust level of the general public. Stringent institutional settings act as a sense of strong structural assurance and situational normality. A rise in trust level would induce people to purchase more policies and carry on risky investments that would ultimately result in higher economic growth.
Originality/value
To the best of the authors’ knowledge, no empirical study has been conducted to examine the impact of institutional and dispositional trust on trust in takaful products with the mediating effect of service provider expertise
Cross-sectional studies of attitude-behavior relationships are vulnerable to the inflation of correlations by common method variance (CMV). Here, a model is presented that allows partial correlation analysis to adjust the observed correlations for CMV contamination and determine if conclusions about the statistical and practical significance of a predictor have been influenced by the presence of CMV. This method also suggests procedures for designing questionnaires to increase the precision of this adjustment.
Trust-based relations appear to foster development, mistrust undermines it. High-trust and low-trust societies are easily recognizable, but how to promote trust as part of a development strategy is less obvious. This paper provides a non-calculative definition of trust and distinguishes between the minimum trust required for basic economic transactions and the extended trust which provides the basis for inter-firm cooperation. Different forms of trust production are discussed. This discussion is used to analyse, first, the problem of the absence of minimum trust in the transition economies of Eastern Europe and the role to be played by the state in creating the framework within which trust can develop. Second, trust in customer-supplier relations and in industrial clusters in developing countries are analysed, and the potential for state intervention, both for creating a stable framework for cooperation and for directly fostering inter-firm cooperation, is considered.
Purpose
– The purpose of this paper is twofold: first, to investigate the role of perceived risk as a moderator of the key relational mediators of satisfaction and trust, and second, to test the influence of perceived product value and social bonding as antecedents of brand satisfaction and brand trust to understand their effectiveness under different risk conditions. Palmatier et al. (2006) call for the study of moderators of relational mediators, such as trust and satisfaction, which may determine the effectiveness of different relationship marketing strategies.
Design/methodology/approach
– This study investigates business-to-consumer relationships between a car brand and its customers, applying structural equation modeling.
Findings
– Results show that perceived risk moderates the mediating role of both brand trust and brand satisfaction on relationship outcomes. When perceived risk is low, brand satisfaction alone determines brand loyalty, whereas when perceived risk is high, brand trust exclusively determines brand loyalty. Thus, the effectiveness of social bonding tactics as a prime determinant of trust is contingent on consumers’ risk perceptions.
Research limitations/implications
– A limitation of the present research is its focus on one product category. Further investigations should be conducted to expand the findings’ generalizability.
Practical implications
– The often-recommended social bonding between boundary spanner and customers is only an effective relationship marketing strategy in situations of high perceived risk.
Originality/value
– This study clarifies the role of perceived risk in marketing relationships by testing alternative models.
There is a distinct lack of research into the relationship between corporate governance and corporate social responsibility (CSR) in the banking sector. This paper fills the gap in the literature by examining the impact of corporate governance, with particular reference to the role of board of directors, on the quality of CSR disclosure in US listed banks’ annual reports after the US sub-prime mortgage crisis. Using a sample of large US commercial banks for the period 2009–2011 and controlling for audit committee characteristics, board meeting frequency, and banks’ profitability, size and risk, we find evidence that board independence and board size, the two board characteristics usually associated with the protection of shareholder interests, are positively related to CSR disclosure. This indicates that, with regard to CSR disclosure, more independent boards of directors and larger boards are the internal corporate governance mechanisms which promote both shareholders’ and other stakeholders’ interests. Contrary to our expectations, CEO duality also impacts positively on CSR disclosure. From an agency-theoretical viewpoint, this suggests that powerful CEOs may promote transparency about banks’ CSR activities for their private benefits. While this could indicate that powerful CEOs are under particular pressure to appease stakeholders’ concerns that they might abuse their power by providing a high degree of CSR disclosure, it could also be a sign of managerial risk aversion or managers’ private reputational concerns.
Success rates of behavior change counseling programs (e.g., weight loss, smoking cessation, and debt management), where consumers seek to overcome their destructive habits and enhance well-being, are very low. Characterized by extended and complex service encounters, the providers of these programs face the challenge of gaining consumers' compliance to adhere to the programs' requirements and turning these consumers into effective co-producers of the service outcomes. This study investigates the process of customer organizational socialization in these programs, how it may promote co-production behaviors, and thus enhance consumers' well-being as well as satisfaction with the organization. The context of debt management programs is used to test the model. Data were obtained from 364 clients of a major credit counseling organization in the United States. The results reveal the differential effects of three aspects of socialization (role clarity, task mastery, and goal congruence) on three different types of consumer co-production behaviors (compliance, individual initiative, and civic virtue). Overall, compliance has the greatest contribution to well-being, while both compliance and individual initiative enhance satisfaction with the organization. Furthermore, consumers with a higher or lower ongoing dependence on the organization have different routes to well-being, with the high-dependence group relying on individual initiative, and the low-dependence group favoring compliance. This study contributes to the literature of co-production, organizational socialization, and consumers' well-being by showing how these three streams are connected. Managerial and policy implications focus on the need for these organizations to include efforts to ensure that consumers are effectively socialized into the program.
Arguably, the most critical time frame for organizational participants to develop trust is at the beginning of their relationship. Using primarily a cognitive approach, we address factors and processes that enable two organizational parties to form relatively high trust initially. We propose a model of specific relationships among several trust-related constructs and two cognitive processes. The model helps explain the paradoxical finding of high initial trust levels in new organizational relationships.
Our research attempts to measure the effects of financial literacy of Turkish financial consumers on the borrowing behaviour. A questionnaire is administered to a sample of 550 people in the city of Eskisehir. In‐depth interviews are undertaken with 10 financial consumers to support the findings. Findings of the study indicate differences in the borrowing behaviour of consumers with different levels of financial literacy. Considering the relationship between financial literacy and borrowing behaviour, we suggest that attempts to increase financial literacy of financial consumers may have important implications in the prevention of excessive borrowing.
Corporate social responsibility (CSR) is changing the rules of branding but it is unclear how. While the literature offers a range of approaches seeking insight to how to manage CSR-related issues, practitioners are left in a state of confusion when having to decide on how to tackle CSR in a way that benefits both the corporate brand and society at large. Based on qualitative empirical research, this article offers a framework for companies to address CSR and their brands strategically, whether as entrepreneurs, performers, vocal converts, or quietly conscientious. We define these categories according to the level of involvement, integration, and the key initiator of the CSR focus. This article concludes with suggestions practitioners should keep in mind when aiming to balance stakeholder tensions and to achieve consistency in their corporate branding and CSR efforts.
While there is a significant amount of research on determinants of selling effectiveness for individual salespeople, there
is a surprising lack of study offactors that affect selling effectiveness in team-selling situations. The authors focus on
the context of key account management (KAM) and develop a conceptual model offactors that affect KAM effectiveness. They test
hypotheses with data from 385 firms using structural equation modeling and find that firms should seek to build esprit de
corps among those involved in KAM, should proactively initiate activities with key accounts and do these activities more intensively,
should ensure that key account managers have access to key resources within the marketing and sales organization, and should
involve top managers of the firm.
Many companies consider investments in complaint handling as means of increasing customer commitment and building customer loyalty. Firms are not well informed, however, on how to deal successfully with service failures or the impact of complaint handling strategies. In this study, the authors find that a majority of complaining customers were dissatisfied with recent complaint handling experiences. Using justice theory, the authors also demonstrate that customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at the outcomes, and the nature of the interpersonal treatment during the process. In turn, the authors develop and test competing hypotheses regarding the interplay between satisfaction with complaint handling and prior experi- ence in shaping customer trust and commitment. The results support a quasi "brand equity" perspective—whereas satisfaction with complaint handling has a direct impact on trust and commitment, prior positive experiences miti- gate, to a limited extent, the effects of poor complaint handling. Implications for managers and scholars are discussed.
The authors develop a theory of how management can develop and promote the learning capabilities of targeted customer-supplier relationships. The theory suggests that a supplier and a customer can improve their joint learning activities by facilitating information exchange, developing common learning arenas, and updating their behavior accordingly. The authors suggest that learning within a customer-supplier relationship cannot be mandated by either organization, but rather learning depends on both parties' willingness to cooperate in joint learning activities. Management can promote relationship learning by cultivating a collaborative culture, formulating specific objectives for joint learning activities, and developing relational trust. However, as relational trust develops, the effectiveness of learning is reduced as a result of "hidden costs" of trust. The authors use data from 315 dyads to test the theory empirically, and they find that the learning capability of a relationship has a strong, positive effect on performance. Their results also provide insight into how to address the hidden costs of trust.
Purpose
The growing importance of relationship marketing has increased interest in the role of consumer trust and loyalty in establishing, developing, and maintaining successful relational exchanges. The aim of this study is first, to examine the differential effects of perceived service quality, trust, and loyalty on repurchase intentions, second, to specify loyalty as a key mediating variable in the consumer‐trust repurchase intentions relationship, and finally, to directly confront the thesis that loyalty is a more powerful determinant of long‐term relationships than trust.
Design/methodology/approach
To test the proposed model in the context of professional services, the authors use data collected from 1,125 customers of a global financial services firm.
Findings
The results highlight customers' willingness to recommend the firm to relatives or friends to be the key driver of customer commitment to the organization.
Research limitations/implications
Although this single‐industry approach may establish the internal validity of the proposed model, replication in alternative service settings is needed to increase the generalizability of the findings. Further research is needed to investigate the longitudinal effects of trust and loyalty on repurchase intentions in professional service contexts.
Originality/value
The findings contribute to understanding of the relationships between different elements of service quality, trust, loyalty, and repurchase intentions; provide critical implications for managers of service organizations; and highlight directions for future research.
For a long time I have had the gnawing desire to convey the broad motivational sig nificance of the attributional conception that I have espoused and to present fully the argument that this framework has earned a rightful place alongside other leading theories of motivation. Furthermore, recent investigations have yielded insights into the attributional determinants of affect, thus providing the impetus to embark upon a detailed discussion of emotion and to elucidate the relation between emotion and motivation from an attributional perspective. The presentation of a unified theory of motivation and emotion is the goal of this book. My more specific aims in the chapters to follow are to: 1) Outline the basic princi ples that I believe characterize an adequate theory of motivation; 2) Convey what I perceive to be the conceptual contributions of the perspective advocated by my col leagues and me; 3) Summarize the empirical relations, reach some definitive con clusions, and point out the more equivocal empirical associations based on hypotheses derived from our particular attribution theory; and 4) Clarify questions that have been raised about this conception and provide new material for still further scrutiny. In so doing, the building blocks (if any) laid down by the attributional con ception will be readily identified and unknown juries of present and future peers can then better determine the value of this scientific product."
The goals of this article are twofold: (a) briefly highlight the merits of residual centering for representing interaction and powered terms in standard regression contexts (e.g., Lance, 1988), and (b) extend the residual centering procedure to represent latent variable interactions. The proposed method for representing latent variable interactions has potential advantages over extant procedures. First, the latent variable interaction is derived from the observed covariation pattern among all possible indicators of the interaction. Second, no constraints on particular estimated parameters need to be placed. Third, no recalculations of parameters are required. Fourth, model estimates are stable and interpretable. In our view, the orthogonalizing approach is technically and conceptually straightforward, can be estimated using any structural equation modeling software package, and has direct practical interpretation of parameter estimates. Its behavior in terms of model fit and estimated standard errors is very reasonable, and it can be readily generalized to other types of latent variables where nonlinearity or collinearity are involved (e.g., powered variables).
Marketing managers are being required to demonstrate the profitability of their marketing actions down to the level of their individual customers and on an ongoing basis. At the same time, customers expect firms to increasingly customize their products and services to meet their demands. Firms still need to produce superior products, sell smarter, and understand the markets as a whole, but the ability of firms to orient themselves to interact successfully with their individual customers will differentiate them in the future. Advances in technology have resulted in increasing opportunities for interactions between firms and customers, between customers, and between firms. An interaction orientation reflects a firm's ability to interact with its individual customers and to take advantage of information obtained from them through successive interactions to achieve profitable customer relationships. First, the authors identify the components of interaction orientation: (1) customer concept, (2) interaction response capacity, (3) customer empowerment, and (4) customer value management. Second, they relate interaction orientation to both customer-level and aggregate-level performance measures. Third, they identify the antecedents of interaction orientation. Fourth, they examine the moderating effects of customer-initiated contacts and competitive intensity on the interaction orientation–performance linkage. The results are based on a survey of top marketing managers. The commonly held view that customer-based relational performance is related to customer-based profit performance is not supported. However, both customer-based relational performance and customer-based profit performance affect aggregate business-level performance positively. Interaction orientation is a phenomenon observed in both business-to-business and business-to-consumer firms. The extent of customer-initiated contacts moderates the interaction orientation–performance relationship.
The authors outline an updated paradigm for scale development that incorporates confirmatory factor analysis for the assessment of unidimensionality. Under this paradigm, item-total correlations and exploratory factor analysis are used to provide preliminary scales. The unidimensionality of each scale then is assessed simultaneously with confirmatory factor analysis. After unidimensional measurement has been acceptably achieved, the reliability of each scale is assessed. Additional evidence for construct validity beyond the establishment of unidimensionality then can be provided by embedding the unidimensional sets of indicators within a nomological network defined by the complete structural model.
Many companies consider investments in complaint handling as means of increasing customer commitment and building customer loyalty. Firms are not well informed, however, on how to deal successfully with service failures or the impact of complaint handling strategies. In this study, the authors find that a majority of complaining customers were dissatisfied with recent complaint handling experiences. Using justice theory, the authors also demonstrate that customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at the outcomes, and the nature of the interpersonal treatment during the process. In turn, the authors develop and test competing hypotheses regarding the interplay between satisfaction with complaint handling and prior experience in shaping customer trust and commitment. The results support a quasi “brand equity” perspective—whereas satisfaction with complaint handling has a direct impact on trust and commitment, prior positive experiences mitigate, to a limited extent, the effects of poor complaint handling. Implications for managers and scholars are discussed.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
Although many consumers turn to financial counseling to improve their financial well-being, the effectiveness of these counseling services remains nebulous and the exact mechanisms through which they improve consumer well-being require further research. This longitudinal research demonstrates that consumers’ coproduction of financial counseling services is pivotal for increasing their credit scores and for decreasing their financial stress. Drawing on self-determination theory, this study also shows that financial literacy, consumer involvement, and attachment styles are important drivers of coproduction. Involvement plays a moderating role, such that higher involvement substitutes for lower levels of financial literacy and mitigates the negative effects of attachment avoidance on coproduction. These findings help both counseling agencies and public policy makers improve the effectiveness of financial counseling. Financial counselors should track their customers’ objective and subjective financial literacy, involvement, and attachment styles, then segment customers, and, finally, tailor the service provision accordingly, to leverage coproduction as the pathway to consumers’ financial well-being. From a public policy perspective, the findings suggest that efforts to improve consumer financial literacy are important but should be supplemented with programs designed to increase consumer involvement in financial counseling; this combination promises to foster coproduction and improve consumers’ financial well-being.
Purpose – This study aims to examine the interplay between focal and background goals in consumer financial decision-making and identify conditions that lead individuals to trade-off financial returns for background goals.
Design/methodology/approach – The current research reviews the relevant literature on consumer financial decision-making and goal systems theory to develop a set of hypotheses that is tested using three experiments.
Findings – The experiments show that individuals who have been subtly primed with self-expressive background goals, or experienced progress toward the focal goal of financial returns, accept lower financial returns for the opportunity to invest in stocks that allow for increased self-expression. Further, while subtly primed background goals exert a non-normative influence on investment decisions, explicit cues about an investment’s background goal-instrumentality create a backlash effect, and decrease individuals’ willingness to trade-off financial returns.
Research limitations/implications – Future research could confirm the robustness of the findings of the present research by using different priming tasks and alternative ways of making the background goal explicit to individuals.
Practical implications – To achieve greater attraction among individual investors, it helps to frame a financial product or stock in communications materials in a way that sends subtle signals with which investors can identify. Such signals could include stressing the product/company’s home country (addressing individuals’ patriotism) or a particular product domain (addressing individual investors’ desire for interesting/exciting current/future products).
Originality/value – While previous research suggests that investment choices may be influenced by self-expressive motivations, to date, it remains unclear whether and when individual investors are actually willing to trade-off the focal goal of maximizing financial returns for the opportunity to satisfy alternative background goals.
Why do consumers often feel pressed for time? This research provides a novel answer to this question: consumers' subjective perceptions of goal conflict. The authors show that beyond the number of goals competing for consumers' time, perceived conflict between goals makes them feel that they have less time. Five experiments demonstrate that perceiving greater conflict between goals makes people feel time constrained and that stress and anxiety drive this effect. These effects, which generalize across a variety of goals and types of conflict (both related and unrelated to demands on time), influence how consumers spend time as well as how much they are willing to pay to save time. The authors identify two simple interventions that can help consumers mitigate goal conflict's negative effects: Slow breathing and anxiety reappraisal. Together, the findings shed light on the factors that drive how consumers perceive, spend, and value their time.
In this article, we survey a growing body of evidence showing the effects of trust on the wealth of nations. It is important to understand the mechanisms through which trust affects the wealth of nations. This article suggests that trust has effects on the wealth of nations mainly through five channels. These channels are: (a) investment in human and physical capital, (b) financial development, (c) public expenditures, (d) regulations and institutions and (e) the organization of firms.
We examine the repair of one party's trust in another via repairing trustworthiness (Mayer, Davis, & Schoorman, 1995). Based on Weiner's (1986) causal attribution theory, we posit that causal attributions (i.e., locus of causality, controllability, and stability) for the cause of a negative outcome in a trusting relationship explain when trustworthiness is in need of repair and how trustworthiness may be repaired by the trustee's efforts. We also discuss the role of specific emotional reactions of the truster in this process.
This paper analyses the robustness of results on the relationship between growth and trust previously derived by Knack and Keefer (1997) and Zak and Knack (2001) along several dimensions, acknowledging the complexity of the concept of robustness. Our results show that the Knack and Keefer results are only limitedly robust, whereas the results found by Zak and Knack are highly robust in terms of significance of the estimated coefficients and reasonably robust in terms of the estimated effect size. The improvement in robustness is caused by the inclusion of countries with relatively low scores on trust (most notably, the Philippines and Peru). Overall, our results point at a relatively important role for trust. However, the answer to the question how large this payoff actually is depends on the set of conditioning variables controlled for in the regression analysis and--to an even larger extent--on the underlying sample. Copyright 2004, Oxford University Press.
When does the general public lose trust in banks? We provide empirical evidence using responses by Dutch survey participants to eight hypothetical scenarios. We find that members of the general public care strongly about executive compensation. Negative media reports, falling stock prices, and opaque product information also affect trust in banks. Experiencing a bank bailout leads to less concern about government intervention, while experience of a bank failure leads to greater concern on bonuses.
This study examines how the sell-side analysts interpret firms’ corporate social responsibility (CSR) activities. Specifically, we examine the differential impact of overall, legal, and normative CSR on the analysts’ earnings forecast dispersion, stock return volatility, cost of equity capital, and firm value. Employing a sample of U.S. public firms during 1993–2009, we find that overall CSR intensities reduce analyst dispersion of earnings forecast, volatility of stock return and cost of capital (COC), and increase firm value. However, its impact is reduced for firms with better accounting and disclosure quality. When we disaggregate CSR into legal and normative CSR, we find that legal (normative) CSR decreases (increases) analysts’ dispersion, stock return volatility, and COC, while legal (normative) CSR increases (decreases) firm value. The sell-side analysts tend to have less (greater) information asymmetry regarding the net benefits of pursuing CSR that is (not) required by laws. We find, however, that the benefit of having normative CSR realized in 1 year lag such that analyst dispersion, stock return volatility, COC decrease, respectively, and firm value increases. Furthermore, we find that the benefit of normative CSR is offset for firms with higher accounting and disclosure quality.
This paper investigates bank structural funding vis-à-vis bank failures. An empirical analysis is conducted on the defaults of commercial banks occurred in the United States between 2007 and 2009. The results highlight that structural funding position indeed plays a significant role in explaining the probability of bank defaults. A balanced funding position, with more deposits and a lower loans-deposits gap to be filled with wholesale funding, positively contributes to the resilience of the banks. Not all deposits are, however, the same: within deposit funding, the higher the reliance on the less-stable components the more likely a bank is to face distress. Results are robust to the sampling and modelling choices as well as to the variable specification used. While the empirical analysis focuses on the US and the loan-to-deposit ratio, the findings can be easily generalized to any banking system, and the relevant policy messages can be extended to the banking stability impacts of the Basel III structural funding regulation.
This study set out to discover the key personal financial areas or "personal financial characteristics" that individuals should have a basic knowledge of as well as their ability to manage their personal finances. Once these areas were determined, a self-assessment survey was created. Upon completion of the survey, a total score can be determined to assess one's degree of personal financial healthiness. The study is important because the instrument can help identify problems areas that people have in managing their own personal finances. The self-assessment survey could be used by financial planners or financial counselors as they work with clients in becoming better stewards of their financial resources. The instrument also provides an action planning area to be used to identify areas for improvement.
This study examines the role of trust in customer–seller relationships before and after the 2008 financial crisis. On the basis of two surveys comprising 1155 and 757 bank customers, respectively, it is shown that trust is less likely to mediate the relationship between satisfaction and loyalty after the financial crisis compared with before the financial crisis. The results suggest that consumers rely more on satisfaction and less on trust after the financial crisis compared with before the financial crisis when determining whether they should remain loyal to a particular financial service provider. Hence, as a direct managerial implication, financial service managers should consider investing additional resources in satisfying their customers in the after crisis era. In addition, it is suggested that managers should seek to rebuild the positive relationship between trust and loyalty in order to receive the full benefit of their trust-building efforts. Copyright © 2014 John Wiley & Sons, Ltd.
Applying the elaboration likelihood model to the initial website trust formation context, this study investigated the cognitive process in which consumers evaluate an unfamiliar website and form website trust. Specifically, it examined consumers' cognitive process of various website design and content factors in the formation of website trust, and the influence of two specific consumer characteristics – situational involvement and e-commerce knowledge – on the cognitive processing. Results from an experiment revealed that the level of e-commerce knowledge was significantly related to the extent of cognitive processing during website trust formation. Also, consumers with a low level of situational involvement and e-commerce knowledge tended to place more focus on website design factors, which are peripheral cues, than did those with a high level of involvement and knowledge. In addition, this study found that consumers with higher levels of involvement were more likely to seek and actively process trust-inducing arguments.
Trust relates not only to customer trust in individual companies (i.e., narrow-scope trust) but also to the broader business context in which customer–seller relationships may develop (i.e., broad-scope trust [BST]). Based on two surveys comprising 1155 bank consumers and 817 insurance consumers, respectively, this study investigates the moderating influence of BST on relationships between satisfaction, narrow-scope trust, and loyalty and also examines the direct influence of BST on these variables. The results indicate that whereas BST negatively moderates relationships between satisfaction and narrow-scope trust and between narrow-scope trust and loyalty, BST positively moderates the relationship between satisfaction and loyalty. In addition, it is demonstrated that BST positively influences customer satisfaction and narrow-scope trust. © 2012 Wiley Periodicals, Inc.
We conjecture that the changes in economic activity from late 2008 to early 2009 is due to a drop in trust. We present new survey evidence consistent with this hypothesis.
Prior research suggests that knowledge calibration (KC) supports consumers’ maintenance of a healthy diet. However, no previous studies have considered that learned helpless consumers may refrain from using their knowledge, even though they may be fully aware that they possess it. This research gap is considered in three studies. Study 1 investigates the moderating effect of learned helplessness (LH) by means of a cross‐sectional survey. Studies 2 and 3 are online choice studies. Besides from replicating Study 1, Studies 2 and 3 eliminate potential social desirability bias by objectively measuring respondents’ dietary choice quality. In addition, Study 3 takes into account the possibility that respondents’ responses may be biased by food preferences, medical conditions, and/or food allergies. Moreover, Studies 2 and 3 both investigate the consequences of the findings on consumers who live under a dieting regime. These studies demonstrate that consumers suffering from LH do not stand to gain from calibrating their dietary knowledge to the same degree as other consumers. It is also shown that dieting behavior has a tendency to weaken this negative moderating effect of LH on the relationship between KC and dietary choice quality. Finally, the implications of the findings for marketers and public policymakers are discussed.
Although the financial crisis has elevated the interest for factors such as consumer financial healthiness, broad-scope trust, financial knowledge, and consumer relationship satisfaction, no existing model describes how these factors may influence consumer financial relationship trust. This research extends prior research by developing a conceptual framework explaining how these constructs affect consumers' trust in their financial service provider. Based on two surveys comprising 764 pension consumers and 892 mortgage consumers, respectively, the results of this study indicate that financial healthiness, broad-scope trust, knowledge, and satisfaction positively affect narrow-scope trust in financial services. Furthermore, it is found that broad-scope trust negatively moderates the relationships between financial healthiness and narrow-scope trust and between satisfaction and narrow-scope trust, respectively. In addition, the results marginally indicate that broad-scope trust negatively moderates the relationship between consumer financial knowledge and narrow-scope trust. This study encourages public policy makers, consumer organizations, and financial service providers to continue, improve, and/or develop consumer financial education programs and also encourages consumers to participate in such programs. This is especially important when broad-scope trust is low. Also, when broad-scope trust is low, financial service providers should consider devoting additional resources in satisfying their customers and/or in improving their financial healthiness.
The relationship of the importance and hedonic dimensions of product involvement to information search is analyzed. Four different models of the role of perceived risk in this relationship are compared and tested. It is expected that perceived risk will mediate the effect of the dimensions of product involvement on information search. Previous investigations have used individual consumers as the units of observation and have, therefore, limited the generalizability of their results to a few products at best. In contrast, the study reported in this paper attempts to determine the relationships of interest with products as the units of observation. It is found that perceived risk fully mediates the effect of the importance dimension of product involvement on information search but not of the hedonic dimension. The effect of hedonic involvement on information search is direct.
We examine the effect of generalized trust on long-term economic growth. Unlike in previous studies, we use Bayesian model averaging to deal rigorously with model uncertainty and attendant omitted variable bias. In addition, we address endogeneity and assess whether the effect of trust on growth is causal. Examining more than forty regressors for nearly fifty countries, we show that trust exerts a positive effect on long-term growth and, based on the posterior inclusion probabilities, suggest that trust is an important driver of long-term growth. Our results also show that trust is key for growth in countries with a weak rule of law.
A major problem encountered in covariance structure analyses involves decisions concerning whether or not a given theoretical model adequately represents the data used for its assessment. Given that X2 goodness-of-fit tests are joint functions of the difference between theoretical and empirical covariance structures and sample size, gauging the impact of sample size on such tests is essential. In this paper, we propose a simple index (critical N) and tentative acceptance criterion, which, by focusing on sample size, provide an improved method for assessing goodness-of-fit. Both small- and large-sample examples are presented, illustrating the utility of the proposed method for assessing theoretical models.
Marketing managers are being required to demonstrate the profitability of their marketing actions down to the level of their individual customers and on an ongoing basis. At the same time, customers expect firms to increasingly customize their products and services to meet their demands. Firms still need to produce superior products, sell smarter, and understand the markets as a whole, but the ability of firms to orient themselves to interact successfully with their individual customers will differentiate them in the future. Advances in technology have resulted in increasing opportunities for interactions between firms and customers, between customers, and between firms. An interaction orientation reflects a firm's ability to interact with its individual customers and to take advantage of information obtained from them through successive interactions to achieve profitable customer relationships. First, the authors identify the components of interaction orientation: (1) customer concept, (2) interaction response capacity, (3) customer empowerment, and (4) customer value management. Second, they relate interaction orientation to both customer-level and aggregate-level performance measures. Third, they identify the antecedents of interaction orientation. Fourth, they examine the moderating effects of customer-initiated contacts and competitive intensity on the interaction orientation-performance linkage. The results are based on a survey of top marketing managers. The commonly held view that customer-based relational performance is related to customer-based profit performance is not supported. However, both customer-based relational performance and customer-based profit performance affect aggregate business-level performance positively. Interaction orientation is a phenomenon observed in both business-to-business and business-to-consumer firms. The extent of customer-initiated contacts moderates the interaction orientation-performance relationship.
The authors suggest that people strategically manage - specifically, lower - their expectations to increase future satisfaction. Consumers who are more disconfirmation sensitive, that is, those who are more satisfied (dissatisfied) when a product performs better (worse) than expected, are hypothesized to have lower expectations. In contrast, the authors expect that consumers who are perfectionists will have higher expectations than those who are not. Results from a laboratory experiment and a field study are consistent with the hypotheses. Furthermore, the authors identify a possible third type of expectation ("as-if") that serves as a basis for post-purchase evaluation and provide preliminary evidence that it differs from both will and should expectations.
Customers are influenced not only by how much they trust a company and its representatives but also by how much they trust the broader context in which the market exchange is taking place. In this article, the authors test two rival sociological perspectives regarding the influence of customer trust in the broader context. One perspective proposes that trust in the context replaces trust in individual firms and their representatives. This view suggests that firm/representative trust is not always critical, especially for customers with high trust in the context. An alternative perspective is that trust in the context fosters and legitimates trust in firms and their representatives. This view implies that firm/ representative trust is a necessary mediator of the influence of trust in the context. The authors test predictions based on both perspectives, using empirical results from two studies implemented in two countries. The results from both studies support the proposition that trust in firms and their representatives is a necessary mediator of trust in the broader context.
Theory and research into the decision-making process have brought to light a wealth of concepts and strategies intended to improve marketing management. This article applies the concept of knowledge calibration, which describes the correspondence between knowledge accuracy and the confidence with which knowledge is held, to the domain of marketing management. Specifically, we apply the concept of knowledge calibration to marketing management’s use of customer feedback information on satisfaction and service quality. After reviewing the appropriate literature, we present a model showing the antecedents and consequences of the calibration of knowledge of customer feedback information along with propositions intended to improve the use of customer feedback and to guide further research. We also discuss the merits and demerits of calibration as well as appropriate actions in different contexts.
The cost-benefit framework is a well established behavioral decision making theory and has shown remarkable consistency across a wide range of studies. One of the frameworks main tenets is that decision makers want to minimize effort (cost) and maximize accuracy (benefit) when making a decision. Research suggests that decision makers will adapt their decision- making process to the task by trading off these two competing desires. However, attempts to apply the cost-benefit framework within the Information Systems (IS) domain have yielded contradictory findings. Some research suggests that decision makers focus only on effort minimization while other research indicates that decision makers will put forth more effort to gain more accuracy. In this research, a theory was introduced positing that since human effort is largely replaced by decision tool effort in an aided analytic decision environment perceived effort will play a greatly reduced role. While perceived effort's importance is diminished in a computer aided environment, the effort the decision maker saves by using the tool was introduced into the computer aided effort-accuracy framework as a third antecedent to behavioral intention to use a decision tool. The theory was tested in an experiment and results indicated that perceived effort saved accounted for 15.1% of the variance in perceived accuracy. Perceived effort saved and perceived accuracy each explained 19.8% of the variance in behavioral intention, while perceived effort had no significant effect on either perceived accuracy or behavioral intention. The findings of this research suggest that perceived effort saved is an influential construct that has been overlooked in the current research based on the effort- accuracy framework and should be included in future research. Practical implications include the need for practitioners to proactively design and implement decision aids to increase the user's perception of the effort they saved by using the tool.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
The authors outline an updated paradigm for scale development that incorporates confirmatory factor analysis for the assessment of unidimensionality. Under this paradigm, item-total correlations and exploratory factor analysis are used to provide preliminary scales. The unidimensionality of each scale then is assessed simultaneously with confirmatory factor analysis. After unidimensional measurement has been acceptably achieved, the reliability of each scale is assessed. Additional evidence for construct validity beyond the establishment of unidimensionality then can be provided by embedding the unidimensional sets of indicators within a nomological network defined by the complete structural model.
Marketing theory experienced a “scientific” crisis over
30 years ago and a new paradigm emerged in the form of
“functionalism”. However, current work in marketing or
“normal science” reflects an older paradigm. A research
agenda rooted in the alternative functionalist paradigm is suggested.
Purpose
This research attempts to understand why – or why not – customers resist switching service providers when a critical incident occurs. The paper examines how service relationship perceptions, such as perceived equity, trust (perceived reliability and benevolence) and relationship commitment (affective and calculative), enhance relationship maintenance and CSR in many critical situations.
Design/methodology/approach
A survey was conducted in the financial service industry on a sample of 1,999 consumers (retail banking) and then conceptualized and measured CSR in several critical situations.
Findings
The paper demonstrates that perceived equity, perceived reliability, perceived benevolence, affective commitment, and calculative commitment do not influence CSR the same way. CSR mainly depends on the type of critical incident which occurs. For instance, calculative commitment, which is an evaluation of the costs associated with leaving the service provider, enhances CSR in three critical situations (service encounter failures, employee responses to service failures, pricing problems), whereas it leads to relationship disengagement in two other critical situations (inconvenience, changes in the consumer or service provider situation).
Research limitations/implications
This research highlights the need to better take into account the different types of critical incident discussed in the relationship marketing literature and to better consider the complementary roles of perceived equity, trust and relationship commitment in the service switching literature.
Originality/value
This research implies that service companies have to anticipate the critical incidents and to develop specific “shock absorbers” to continue doing business with their current customers.