Abstract

In the midst of promising perceived benefits, the electronic commerce (EC) environment entails greater challenges than those posed by conventional trade. In addition to privacy and security concerns, researchers and businesses alike are increasingly aware that the lack of trust for online vendors experienced by consumers constitutes a serious barrier to the widespread adoption and successful proliferation of EC. The process of building trust between consumers and vendors in the online environment thus becomes of paramount importance. This study seeks to examine how online vendors can develop trusting relationships with consumers through the establishment of virtual communities (VCs), fast becoming a notably successful online business model with relationship-enhancing and trust-building capabilities. By integrating multi-disciplinary theories, we propose and empirically validate a model, which proposes that increased levels of involvement in VCs enhances trust building among members and vendors, in turn encouraging greater EC participation in light of lower perceived risks and greater perceived benefits of online transactions. Results indicate that these relationships as proposed in the model are significant. There is empirical support that VCs constitute a successful business model of building trust, reducing perceived risks of purchase, improving customer relationships, reducing search costs, and retaining customers, leading us to conclude that increased involvement in VCs indeed has a positive effect on EC participation.

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