Inf Syst E-Bus Manage (2012) 10:219240 DOI 10.

1007/s10257-010-0136-2 ORIGINAL ARTICLE

An investigation of the effect of online consumer trust on expectation, satisfaction, and post-expectation
Dan J. Kim

Received: 20 September 2009 / Revised: 10 November 2009 / Accepted: 13 November 2009 / Published online: 26 June 2010 Springer-Verlag 2010

Abstract This study proposes a framework regarding the relationship between consumer trust, satisfaction, expectation, and post-expectation in the context of electronic commerce. In particular, the framework draws together from three theories: social exchange theory, expectation-conrmation theory, and post-acceptance model of IS continuance. Following the longitudinal pre-purchase and postpurchase stages, this study provides a theoretical framework combining trust, expectation, satisfaction, and post-expectation (i.e., perceived usefulness) and tests the proposed model empirically using Internet consumer behavior data collected via two rounds of Web surveys. The empirical ndings suggest that both consumers trust and expectation have positive inuences on consumers satisfaction; a signicant and positive relationship is detected between consumers trust and expectation; customers satisfaction and perceived usefulness as post-expectation belief are important predictors of repurchase intention. In consequence, the study provides a framework explaining the subsequent relationships of trust, expectation, conrmation, satisfaction, post-expectation, and repurchase intention (i.e., consumer trust ? expectation ? conrmation ? satisfaction ? post-expectation ? repurchase intention) across pre-purchase and post-purchase stages. Theoretical and practical implications are discussed. Keywords Consumer trust Consumer satisfaction Expectation-conrmation theory Social exchange theory Post-acceptance model Pre-purchase and post-purchase stages

D. J. Kim (&) Computer Information Systems, University of Houston-Clear Lake, Houston, TX, USA e-mail: kimdan@[Link]

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1 Introduction Trust and satisfaction are essential ingredients for successful long-term business relationships with customers (Doney and Cannon 1997; Garbarino and Johnson 1999; Kim 2008; Kim et al. 2009; Moorman et al. 1993; Morgan and Hunt 1994). Several studies have focused on various issues of trust in e-commerce (Awad and Ragowsky 2008; Bhattacherjee 2002; Brynjolfsson and Smith 2000; Choudhury and Karahanna 2008; Gefen 2002; Guangquan et al. 2007; Kim et al. 2005; Kim et al. 2008b; Lim et al. 2006; McKnight et al. 2002a; Nicolaou and McKnight 2006; Stewart 2006; Urban et al. 2000; Vance et al. 2008). Most researchers agree that electronic commerce can only be successful if customers trust sellers and products they cannot see or touch and the new virtual channel of commerce with which they have no prior experience. Therefore, the issue of trust may be even more important in electronic commerce than traditional commerce since Internet business is based on the consumers trust in processes, in contrast to that of traditional business involving brick and mortar stores where trust is based on personal relationships and on interactions between the consumer and the merchant. Satisfaction also has been discussed extensively as a central concept and a topic of interest throughout the psychology, marketing, management, and information system literature (Anderson and Sullivan 1993; Cyr 2008; Flavian et al. 2006; Lee and Overby 2004; Oliver 1999; Patterson et al. 1997; Selnes 1998). Customer satisfaction is a post-purchase attitude formed through a mental comparison of the service and product quality that a customer expected to receive from an exchange and the level of service and product quality the customer perceives from the exchange. Different satisfaction models and theories have been developed in order to dene and explain the phenomenon related to consumer satisfaction. The dominant conceptual model in the consumer satisfaction area is the ExpectationConrmation Theory (ECT)1 (Kristensen et al. 1999). ECT states that customer satisfaction develops from a customers comparison of post-purchase evaluation of a product or service with pre-purchase expectations. Even though trust and satisfaction are important issues for those most involved in relationship management and the issues have been a focus of study for many years, there is little research on their relationship in the electronic commerce context from a longitudinal perspective. The purpose of this study, therefore, is to develop a theoretical framework combining trust and expectation in the pre-purchase phase and consumer satisfaction, post-expectation, and post-purchase intention in the postpurchase phase and test the proposed models empirically using Internet consumer behavior data collected via two rounds of pre-purchase and post-purchase Web surveys. More specically, this study tackles a research question: are there any theories to explain the subsequent relationships of trust, expectation, satisfaction, post-expectation, and post-purchase behavior in the e-commerce context from a longitudinal perspective?

This theory is also named Disconrmation of Expectations Theory or Expectation Conrmation and Disconrmation Theory.

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There are two major contributions of this study. This research provides an extended framework explaining the subsequent relationships of trust, expectation, satisfaction, post-expectation (i.e., perceived usefulness), and repurchase intention in the electronic commerce context from longitudinal lens (i.e., pre-purchase and post-purchase stages). Consequently, this study enhances our understanding of the subsequent relationship across pre- and post stages from a holistic perspective. The remainder of the paper is organized as follows. The next section discusses three background theories and integrates them into an extended model. The third section describes the research model of the study with the hypotheses. The fourth section discusses the research methodology and data collection procedure. The fth section presents data analysis and results. The nal section discusses key ndings and concludes the article with a discussion of contributions, limitations, and future directions of the study.

2 Theoretical background Three different theoretical perspectives have been identied as background theories: Social Exchange Theory, Expectation-Conrmation Theory, and Post-Acceptance Model of IS continuance. While the initial completion of a transaction is an important rst step to creating a business-to-consumer trust relationship, the longterm relationship depends on post-purchase decisions rather than the rst-time use (Kim et al. 2009; Oliver 1993). A satisfactory exchange experience would appear to be a key requirement for the type of continued interest in an online vendor (e-vendor hereafter) that might lead to repeated purchases (Oliver 1993). From a Social Exchange Theory (SET) perspective, the consumer-supplier (client-vendor) relationships terminate or continue based on the prior history of the relationships (Van de Ven 1976). Levinthal and Fichman (1988) studied the determinants of persistent relationships based on past exchanges that resulted in increasing the likelihood of future exchanges. Two important factors related to this study from SET perspective are time discrepancy and satisfaction. In online exchanges, the placement of orders and payment for the product and services occurs sometime before order fulllment. In other words, one party (usually consumers) needs to trust that the other party (companies or other consumers) will deliver the goods properly subsequent to payment. Therefore consumer trust becomes a critical factor for a Business-to-Consumer online exchange to occur successfully. Another factor is consumer satisfaction. If consumers are satised with a suppliers performance, both parties will build mutual understanding, and the relationships will be more likely to continue. Therefore, as the consumers satisfaction increases with respect to the vendors performance, the intention to continue the relationships with existing vendors increases. When vendors are continually proven to provide quality products and services, customers will revisit the vendor based on their prior experiences. Another theoretical perspective used to explain the relationship between consumer expectation, satisfaction, and their repurchase intention is ExpectationConrmation Theory. This theory has been widely used in service marketing

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literature and IS area (Anderson and Sullivan 1993; Bhattacherjee and Premkumar 2004; Dabolkar et al. 2000; Kim et al. 2009; Oliver 1993; Oliver 1999; Patterson et al. 1997; Spreng et al. 1996; Swan and Trawick 1981) to describe the formation process of consumer satisfaction from a longitudinal view (i.e., pre-purchase and post-purchase stages). According to the theory (see Fig. 1) described by Oliver (1980; 1999) and Kim, et al. (2009), at pre-purchase stage consumers form an initial expectation (i.e., Expectation) prior to making a specic transaction. The term expectation refers to what consumers believe they should and will receive from sellers through the transaction. After a period of initial consumption, they form perceptions about its performance (i.e., Perceived Performance). Next, they assess ` -vis their original expectation and determine the its perceived performance vis-a extent to which their expectation is conrmed (i.e., Conrmation). They form a satisfaction level based on their conrmation and their expectation. Finally, the satised consumer forms a repurchase intention.

Pre-Purchase Stage
Perceived Performance

Post-Purchase Stage

(+)

Confirmation (- / +)

(+) Satisfaction

(+)

Repurchase Intention

Expectation

(+)

Expectation-Confirmation Theory (ECT): (Oliver, 1980, 1993, Anderson & Sullivan 1993)

Post-Stage
Post-Expectation (Perceived Usefulness) (+)

(+)
Satisfaction (+) Continuance Intention

(+)

(+)
Confirmation

Post-Acceptance Model (PAM): (Bhattacherjee, 2001)

Fig. 1 Expectationconrmation theory and post-acceptance model

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Although the predictive ability of ECT has been well demonstrated across a wide range of contexts including marketing, electronic commerce, and information systems, it has been the subject of several debates. Bhattacherjee (2001) summarizes these debates well: (1) ECT ignores potential changes in consumers expectation after their consumption experience, because post-purchase expectation may be different from their pre-purchase expectation; (2) there are varying and conicting conceptualizations of the satisfaction construct in initial studies of ECT; and (3) conceptualization of expectation also differs across ECT studies. Based on ECT and its limitations, Bhattacherjee (2001) proposes a theoretical framework (namely a Post-Acceptance Model) in the context of IS continuance. He argues that the proposed model mainly focuses on post-acceptance variances because the effects of any pre-acceptance variables are already captured within the conrmation and satisfaction constructs. The proposed model includes ex post expectation, which is represented by perceived usefulness as a post-consumption expectation (Bhattacherjee 2001). However, a limitation of the model and a future direction for model extension, as Bhattacherjee (2001) pointed out, is the dynamic interrelationships such as changes in the level of expectations across pre- and post-phases that are not captured and tested. The rst part of Fig. 1 presents constructs and relationships in ECT. Note that the variables ranging from expectation to repurchase intention form a sequential process and all constructs in ECT except expectation are post-consumption variables. The second part of Fig. 1 shows associations among constructs in Post-Acceptance Model (PAM). While PAM proposes several salient determinants of IS continuance intention such as satisfaction and post-expectation (i.e., perceived usefulness) as beliefs weighted with an evaluation of previous transactions, a couple of logical limitations of the model are identied. First, satisfaction is an output of a consumers judgment resulting from experiences and observations of previous transaction performance (Oliver 1993; Oliver 1999). Perceived usefulness as a post-consumption expectation is a salient belief consistently inuencing future IS continuance intention. It is a logical sequence to propose that a judgment of previous transaction (i.e., satisfaction) affects the level of anticipation of future performance (i.e., perceived usefulness). Therefore, instead of the causality direction from perceived usefulness to satisfaction proposed by PAM, it is more logically sound to propose the direction of causality as the other way around (i.e., from satisfaction to perceived usefulness). In addition, as Bhattacherjee (2001) discussed, the effects of any pre-acceptance variables are already captured within the conrmation and satisfaction constructs. Conrmation, in turn, inuences the level of satisfaction positively and negatively as a realization of the previous expectation. As an outcome of subjective judgment of previous experience, satisfaction affects the level of perceived usefulness. Thus, the causality relationship between conrmation and post-expectation (i.e., perceived usefulness) is redundant in some sense.

3 Theory development and hypotheses Synthesizing the importance of consumer trust and satisfaction from social exchange theory along with two background theories (ECT and PAM), a theoretical

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research framework is proposed in this study (see Fig. 2). The framework is based on the two stages of consumer purchase behavior: pre-purchase and post-purchase stage. Considering the discussed limitations of ECT and PAM, the framework is mainly extended from the expectation-conrmation theory and post-adoption model as background frameworks. The research model consists of two underlying processes: expectation-conrmation process and repurchase process. In the expectation-conrmation process, consumers evaluate their previous e-commerce transaction decisions. Through this evaluation process, consumers form a positive or negative level of satisfaction. In the repurchase process, consumers update their expectation (i.e., post-expectation) based on the level of satisfaction as an ultimate outcome of their rst-hand experience. The post- expectation, in turn, directly affects their future repurchase decisions. Satisfaction also plays a key role in the repurchase process directly and indirectly through the post-expectation (i.e., perceived usefulness). Consumer Trust Propensity refers to a customers personality traits that lead to generalized expectations about trust. A consumers propensity to trust is a general inclination to display faith in humanity and to adopt a trusting stance toward others (Gefen 2000). This tendency is not based upon experience with or without knowledge of a specic trusted party, but it is the result of ongoing lifelong experience and socialization (Fukuyama 1995; McKnight et al. 1998; Rotter 1971). This disposition is especially inuential when customers have not had an extensive personal interaction with the selling entities (Kim et al. 2008a; McKnight et al. 1998; Rotter 1971). Since consumers have different developmental experiences, personality types, and cultural backgrounds, they differ in their inherent propensity to trust. Thus, we posit that: Hypothesis 1 Consumers trust propensity positively affects their trust.
Post-Purchase Stage
Post-Expectation (Perceived Usefulness)

Pre-Purchase Stage

Consumer Trust Propensity

Perceived Performance

H1(+) H6(+) Consumer TRUST H2(+) H8(+) H9(+)

H3(+) H5(?) Expectation

H7(+) Confirmation Satisfaction

H10(+)

Repurchase intention

H4(+) Repurchase Process Expectation-Confirmation Process

Fig. 2 A research model

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Consumer trust is a critical construct in the pre-purchase stage since trust has been identied as a vital factor in electronic commerce (Gefen 2000; Jarvenpaa et al. 1999; McKnight and Chervany 2002; McKnight et al. 2002b; Ratnasingam 1998; Urban et al. 2000). Prior trust research on traditional commerce focused primarily on interpersonal trust, such as a customers trust in a salesperson. However, Plank et al. (1999) suggest a denition of trust toward multiple objects: salesperson, product, and company. They dene trust as a global belief on the part of the buyer that the salesperson, product, and company will fulll their obligations as understood by the buyer. In electronic commerce, an e-vendors Website replaces a salespersons functionalities, which represent a company and introduce products as well. In this paper, Internet consumer trust is dened as a consumers subjective belief that a selling party or entity2 will fulll its transactional obligations as the consumer understands them. In consumer marketing research, the causal relationship between trust and satisfaction has been discussed for many years. Several authors suggest trust precedes satisfaction (Armstrong and Yee 2001; Flaherty and Pappas 2000; Liu and Leach 2001), which means trust leads to satisfaction in the exchange relationship between buyers and sellers. Ratnasingham (1998) argued, Trust is an essential ingredient for electronic commerce in creating loyal and very satised customers. A survey research conducted by Chakravarty et al. (1997) conrmed the concept. In the study, trust is regarded as the most important factor in determining consumers satisfaction with their banks. Some others hypothesize a positive ow from satisfaction to trust (Ganesan 1994; Geyskens et al. 1999; Siguaw et al. 1998). Like the chicken and egg relationship, empirical verication of this relationship is not easy. Trust has a positive direct and indirect relationship with satisfaction. Dwyer et al. (Dwyer et al. 1987) argue that trust affects levels of performance, in turn, leads to greater satisfaction. Kim et al. (Kim et al. 2009) found that trust has direct and indirect effects on a consumers purchase decision and also has a long-term impact on consumer e-loyalty through satisfaction. Therefore: Hypothesis 2 Consumers trust in an e-vendor at pre-purchase stage is positively associated with the level of transaction satisfaction at post-purchase stage. Regarding the effect of consumer trust at pre-purchase stage on the level of satisfaction with a previous transaction at post-purchase stage, we can expect that without a minimum amount of trust at pre-purchase stage, no transaction is likely to happen, letting alone consumer satisfaction. Thus, the trust-satisfaction relationship is developed through repeated interactions. For the rst time buyer, even if he or she doesnt have previous direct experience with the seller, the initial trust is formed by indirect experience such as reputation, recommendation, information quality of the sellers website and so on. When the buyer trusts the seller, he or she will feel secure by way of an implicit belief that the actions of the seller will result in positive outcomes rather than negative outcomes (Andaleb 1996). Thus, a more trusting

In this denition, the selling party or entity refers to a rm including its website because all e-commerce transactions go through the website.

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buyer has more positive expectation than a less trusting buyer has. Based on the argument above, we hypothesize that: Hypothesis 3 Consumers trust in an e-vendor at pre-purchase stage is positively associated with the level of consumers expectation of the e-vendor. Once consumers make a transaction trough an e-vendors Website, the transaction will be evaluated or compared to the consumers prior expectations and the actual performance of the product and service as perceived after its consumption. ECT describes this evaluation process well. In ECT, the perceived performance refers to the consumers perception of the quality or value of the product or service after it is purchased and/or consumed (Churchill and Surprenant 1982). Conrmation is dened as the customers evaluation of a products or services performance. Conrmation is the consumers judgment of the actual performance relative to a pre-purchase comparison standard such as expectation. The main hypotheses in ECT are widely proposed and empirically tested in marketing and information systems area (Anderson and Sullivan 1993; Bhattacherjee 2001; Oliver 1980; Oliver 1993). In e-commerce context, consumers satisfactory e-commerce transaction with an e-vendor is mainly determined by the conrmation of their expectations based on their perception of the previous transaction performance. The conrmation of their previous expectation on the e-commerce transaction leads to a positive inuence on their satisfaction level. In order words, when performance exceeds expectations, it results in positive conrmation, leading to a high level of satisfaction. When performance is worse than expectations, it will result in negative conrmation, leading to a low level of satisfaction. Thus, in line with the main hypotheses of ECT and the reasoning above, this study proposes: Hypothesis 4 satisfaction. Hypothesis 5 Consumers performance expectation positively inuences their Consumers performance expectation inuences their conrmation.

Hypothesis 6 Consumers positive perceived performance affects their conrmation regarding their expectation at pre-purchase stage. Hypothesis 7 Consumers positive conrmation positively affects their satisfaction.

After the evaluation of an e-commerce transaction, post-consumption expectation is formed. Consumers post-expectation is different from their expectation at prepurchase stage. Before consumers have a rst-hand experience, expectation is built based on their perception on the selling partys characteristics such as reputation, size and from other sources such as information disseminated through media and others comments. In contrast, post-expectation is mainly tempered by their direct experience. In particular, when the initial expectation is not concrete because of the uncertainty over what to expect from the selling party, their direct experience is a critical component to build their expectation at next stages. Bhattacherjee (2001) argues that post-expectation is represented as ex post perceived usefulness. Although expectation may be a broader construct, perceived usefulness is an adequate expectation in a specialized context such as IS continuance or e-commerce

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repurchase decision because it is the only belief that is demonstrated to consistently affect intention across temporal stages (Bhattacherjee 2001). Hypothesis 8 Consumers positive satisfaction positively affects their postexpectation (i.e., perceived usefulness). IT adoption literature (Bhattacherjee 2001; Davis 1989; Davis et al. 1989; Holsapple and Sasidharan 2005; Venkatesh and Davis 2000) has consistently found that perceived usefulness is the most important determinant of users adoption intention. Consumer satisfaction is the result of a process of post-purchase evaluation and comparison, which affects his or her intention for future repurchase (Anderson et al. 1994; Bearden and Teel 1983; Churchill and Surprenant 1982; Fornell and Westbrook 1984; Oliver and Linder 1981; Yi 1990). Consistent with the results, it is plausible that consumers adjusted post-expectation and their satisfaction with prior transaction can directly inuence consumers continuance decision in the repurchase process. Therefore, this study proposes that perceived usefulness and satisfaction are primary determinants of repurchase intention at the post-purchase stage. Hypothesis 9 Consumers positive post-expectation (i.e., perceived usefulness) positively affects their repurchase intention. Hypothesis 10 Consumers positive satisfaction positively affects their willingness to repurchase (i.e., repurchase intention).

4 Research methodology and data collection This study used a Web-based survey. Web-based surveys have many advantages over traditional methods: they are convenient, cheap, fast, more accurate, and can survey hard-to-reach respondents. On the other hand, there are some limitations of Web surveys: unequal opportunity and self-selection to participate (David 2000; MeCullough 1998). Even though only respondents who are able to access the Internet are able to participate in this survey, this bias is exactly what is desired for the data of online respondents of this study. The instrument development was carried out by following the three stages suggested by Moore and Benbasat (1991): (1) item creation (2) scale development, and (3) instrument testing. In the rst stage, item creation, existing measurement items were reviewed for the study. Most measurement items were adapted from previous research and modied to t the context of this research. For the second stage, scale development, a panel of experts reviewed the instrument to access the validity and to identify ambiguous items of the instruments created in the rst step. All instruments were measured using multi-item scales. As recommended by Anderson and Gerbing (1984) and Bentler and Chou (1987), each construct was measured by at least three observable indicators. The items were written in the form of statements or questions. Most measurements used a 7-point Likert rating scale system with end points such as strongly disagree/strongly agree, extremely unlikely/ extremely likely, and not at all condent/completely condent. For the instrument testing, the last stage of instrument development, a pilot test was conducted prior to

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collecting data for the eld test. All measurement items are summarized in Appendix 2. The dataset used for the eld study was collected from students enrolled in two universities in Korea. While students represent only a portion of the online shopper population, several studies (Houston and Taylor 1999; Kovar et al. 2000) have utilized them as subjects, as they provide a reasonable surrogate for online consumers. Questions related to pre-purchase stage including consumer trust propensity, consumer trust and expectation were collected from the rst round survey. Survey questions related to post-purchase stage were collected from the second round survey. Online consumers are generally younger and more educated than conventional consumers are, according to the OECD report (OECD 1998) and Kotkins (1998) research. Even if subject itself has a sampling limitation, students are good representatives of online shoppers. The other reason of collecting data from students is that this study needs longitudinal data collected at both pre-purchase and postpurchase stages. Since it is not easy to collect online consumers longitudinal data from actual online shoppers, students make up a relatively good sample set for online shoppers. Students participated in the study voluntarily for extra credit. They were asked to visit at least any two B-to-C e-vendors Websites to shop for an item of their choice (e.g. book, CD, clothes, software, an auction, wine). Students were asked to go through the entire buying process at both sites except the clicking of the buy button to purchase the product. Then, to ensure that the data had adequate variance in the dependent variable, students were randomly assigned to complete one of two questionnaires: one questionnaire asked questions about the site from which a participant was more inclined to make a purchase; the other questionnaire asked questions about the site from which a participant was less inclined to make a purchase. Finally, after completing the survey, participants were asked to go ahead and purchase the item from their preferred site. The second round survey was conducted a few weeks later after the respondents of the rst round survey received and began using an item that they ordered. After eliminating duplicate or incomplete responses, 182 individuals were used in this study. The demographic characteristics of respondents are summarized in Appendix 1.

5 Data analyses and results To test the proposed research model, SmartPLS3 2.0 M3 was used for both the measurement model and structural model for data analysis (Ringle et al. 2006). Based on a component-based Partial Least Square (PLS) regression technique, SmartPLS supports complex nomological network models with less stringent data requirements (e.g., no distribution assumptions) and minimal demand of sample size, recommended at ten times the number of maximum arrowheads pointing to a
3

SmartPLS is a relatively new and easy to use software application for the design of structural equation models (SEM) that allows graphical path modeling with latent variables (see [Link]

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latent variable4 (Temme et al. 2006). To ensure the appropriateness of the research instrument, it was tested for reliability, construct validity, and content validity. 5.1 Reliability Since all constructs in this study are reective, the assessment of the measurement model includes the estimation of internal consistency for reliability, and the convergent and discriminant validity for construct validity (Bollen 1989; Chin and Gopal 1995). The internal consistency for reliability of the measurement models was tested using Cronbachs alpha and Fornells composite reliability5 (Fornell and Larcker 1981). The composite reliability should be greater than the benchmark of .7 to be considered adequate as recommended by Fornell and Larcker (1981). All composite reliabilities of constructs have a value higher than .7, indicating adequate internal consistency (Nunnally 1978). All constructs have an Average Variance Extracted (AVE) of at least .5 (Fornell and Larcker 1981). AVE having greater than .5 means that more than 50% of the variance of the measurement items can be accounted for by the latent variables. The Cronbach reliability coefcients of all variables are higher than the minimum cutoff score of .60 (Nunnally 1978), .65 (Lee and Kim 1999), or .70 (Nunnally 1978; Nunnally and Bernstein 1994). The Reliability alpha, the composite reliability, and the calculated AVE of all constructs have values higher than the suggested criteria. Table 1 shows the descriptive statistics of constructs, the summarized reliability indices, and adapted literature sources of measurement items. 5.2 Construct validity Construct validity was examined by convergent validity and discriminant validity (Chin et al. 1997). Convergent validity is the measure of constructs that theoretically should be related to each other. Discriminant validity is the measure of constructs that theoretically should not be related to each other. Both convergent validity and discriminant validity work together as subcategories or subtypes of construct validity; neither one alone is sufcient for establishing construct validity (Chin 1998b). The acceptable level of convergent validity is when all item loadings are greater than .50 (Wixom and Watson 2001), and the items for each construct load onto only one factor with an eigenvalue greater than 1.0; this is an indication of convergent validity. The cumulative percentages of variance explained by each factor are greater than 65% at least. Table 2 shows loadings, eigenvalues, and the cumulative percentage of variance for all factors.

Since the number of maximum arrowheads in the research model that point to satisfaction is three, this study has enough number of samples to test the proposed model. P 2 ki varF 5 P . Composite reliability P 2 ki varF Hii

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230 Table 1 Descriptive statistics and reliability coefcients for constructs Constructs Number Mean SD of items 3 3 3 3 4 4 4 4.35 4.08 4.13 4.59 4.29 4.36 4.78 Alpha Composite AVEa Scales adapt from reliability .907 .845 .845 .916 .903 .910 .869 .765 .652 .663 .783 .701 .717 .625 Gefen (2000)

D. J. Kim

Consumer trust propensity Consumer trust Expectation Perceived performance Conrmation Satisfaction Post-expectation (perceived usefulness)

1.03 .846 .91 .738 .92 .744 .93 .862 .89 .858 .77 .869 .97 .808

Gefen (2000), Jarvenpaa et al. (2000), Portz (2000) Fornell (1992), Fornell et al. (1996) Davis (1989), Davis et al. (1989) Bhattacherjee (2001), Oliver (1999) Spreng et al. (1996) Bhattacherjee (2001), Davis (1989) Gefen (2000), Jarvenpaa et al. (2000), Mathieson (1991)

Repurchase intention 4

4.46

1.01 .868

.910

.719

P 2 ki varF Average variance extracted P ki2 varFP Hii

For evaluating discriminant validity, the average variance extracted (AVE) can also be used. It is suggested that the square root of AVE from the construct should be higher than the variance shared between the construct and other constructs in the model (Chin 1998a; Fornell and Larcker 1981). In other words, the discriminant validity can be checked by examining whether the correlations between the constructs are lower than the square root of the average variance extracted. Table 3 shows the square root of AVE from each construct is higher than the correlations between the construct and other constructs, which indicates that reasonable discriminant validity among constructs exists. 5.3 Content validity To ensure content validity, a thorough review of the literature on the subject of the study was conducted. Aforementioned, most measurement items were adapted from published literature sources and modied to t the context of this research. The questionnaire was also pilot tested by having a panel of experts (professors and IS professionals) review it, after which necessary changes were made to improve both the content and clarity of the questionnaire. Then a sample of respondents (separate from those included in the pilot test) was asked to check the questionnaire. These and all pilot test respondents were excluded from the sample used for data analysis. 5.4 Structural model assessment To test path coefcient signicance of the structural research model, SmartPLS was used with bootstrapping algorithm with 500 samples. The assessment of the structural

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Table 2 Cross factor loadings, eigen values, and cumulative percentage of variance Constructs 1. Consumer trust propensity Items Q1 Q2 Q3 2. Consumer trust Q4 Q5 Q6 3. Expectation Q7 Q8 Q9 4. Perceived performance Q10 Q11 Q12 5. Conrmation Q13 Q14 Q15 Q16 6. Satisfaction Q17 Q18 Q19 Q20 7. Post-expectation (perceived usefulness) Q21 Q22 Q23 Q24 8. Repurchase intention Q25 Q26 Q27 Q28 Eigenvalue Percent of explained variance 1 .863 .923 .835 .130 .085 .131 .171 .148 .155 .116 .134 .221 .060 .051 .098 -.010 .072 .024 .095 -.013 .247 .230 .134 .118 .080 .058 .096 .110 2.70 67.55 2 .020 .084 .055 .238 .294 .096 .429 .395 .307 .520 .519 .620 .831 .817 .874 .825 .649 .542 .547 .589 .081 .191 .214 .272 .652 .661 .497 .423 1.96 65.62 3 .182 .222 .009 .461 .355 .189 .848 .875 .711 .420 .571 .430 .444 .368 .425 .306 .360 .365 .357 .213 .156 .323 .325 .335 .445 .367 .370 .271 2.01 65.54 4 .058 .160 .028 .327 .296 .063 .370 .379 .309 .530 .479 .613 .591 .531 .584 .525 .695 .559 .557 .486 .157 .254 .173 .316 .906 .901 .833 .740 3.13 78.34 5 .089 .191 .184 .382 .337 .083 .501 .475 .296 .882 .875 .898 .655 .499 .516 .397 .539 .484 .460 .397 .172 .317 .206 .339 .629 .566 .505 .341 2.93 73.43 6 .192 .162 .199 .373 .460 .372 .277 .416 .230 .249 .324 .345 .279 .243 .232 .101 .203 .241 .282 .075 .714 .866 .723 .848 .293 .226 .355 .130 2.89 71.82 7 .025 .061 .056 .319 .237 .086 .351 .316 .275 .459 .441 .575 .607 .558 .617 .516 .829 .871 .864 .822 .006 .191 .224 .235 .659 .640 .550 .452 1.96 65.62 8 .101 .131 .118 .912 .870 .606 .378 .413 .278 .357 .326 .306 .231 .255 .274 .157 .261 .243 .265 .217 .235 .347 .351 .498 .310 .301 .309 .127 2.93 73.29

model includes estimating path coefcients and R2. Both R2 and the path coefcients indicate model t (effectiveness), i.e., how well the model is performing (Hulland 1999). The model t is a measure of the validity of the model, and statistical testing (t test) of path coefcients is used to make conclusions regarding the research hypothesis. The interpretations of R2 and the path coefcient are identical to that of the traditional regression model (Chin 1998b). The R2 value is an indicator of how well the model ts the data. The results of model assessment are presented in Fig. 3. As shown in Fig. 3, consumer trust propensity shows a positive effect on consumer trust (b = .136, p \ .05), supporting H1. Even though consumer trust

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232 Table 3 Correlations of latent variables 1 1. Consumer trust propensity 2. Consumer trust 3. Expectation 4. Perceived performance 5. Conrmation 6. Satisfaction 7. Post-expectation (perceived usefulness) 8. Repurchase intention .875 .136 .194 .181 .063 .056 .209 .098 .808 .444 .370 .275 .294 .480 .317 .814 .531 .467 .387 .383 .435 .885 .629 .561 .348 .615 .837 .691 .264 .669 .847 .240 .687 2 3 4 5 6 7

D. J. Kim

.791 .303 .848

Diagonal elements are the square root of AVE. These values should exceed the inter-construct correlations for adequate discriminant validity

Pre-Purchase Stage

Post-Purchase Stage
Post-Expectation (Perceived Usefulness) 2 (R = .158)

Consumer Trust Propensity

Perceived Performance

.136* .530*** Consumer TRUST 2 (R = .019) .198* .240** .147*

.444*** .185* Expectation 2 (R = .197)

Confirmation 2 (R = .420)

.644***

Satisfaction 2 (R = .490)

.652***

Repurchase intention 2 (R = .492)

.043

Repurchase Process

Expectation-Confirmation Process Note: * Significant at the 0.05, ** significant at the 0.01, *** significant at the 0.001 level

Fig. 3 Results of the structural model testing

propensity may have a signicant positive relationship with consumer trust, the proportion of the variation of consumer trust that is explained by propensity is weak (.019). The path between consumer trust and satisfaction is signicant (b = .198) at the .05 level, indicating that consumer trust is positively related to consumer satisfaction (supporting H2). Consumer trust has very strong positive effect on expectation (b = .444, p \ .001), supporting H3. As expected, all hypothesized paths in expectation-conrmation process of the model are signicant at the .05 level except the path between expectation and satisfactions. Expectation has a positive effect on satisfaction (b = .043, p [.05), but it is not signicant at the .05 level, so H4 is not supported. Expectation has a signicant positive effect on conrmation (b = .185, p \ .05), supporting H5.

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Perceived performance has a very strong positive effect on conrmation (b = .530, p \ .001), supporting H6; Conrmation also has very signicant effect on satisfaction (b = .644, p \ .001), supporting H7. In the repurchase process of the model, satisfaction signicantly affects the formation of post-expectation (b = .240, p \ .01), supporting H8. Post-expectation, in turn, has a positive effect on purchase intention (b = .145, p \ .05), supporting H9. Finally, the path coefcient between satisfaction and repurchase intention is very signicant (b = .652) at the signicance level p \ .01, supporting H10. The R2s for conrmation, satisfaction and repurchase intention are .42, .49, and .492, respectively, which indicate that the exogenous variables of each construct explain 42, 49, and 49% of the variance of each construct, respectively. For example, the exogenous variables of satisfaction (i.e., consumer trust, expectation, and conrmation) altogether explain 49% of the variance of satisfaction. The R2s for consumer trust, expectation, and post-expectation are relatively low, .19, .197, and .158, respectively. Since only one exogenous variable explains each construct in this model, the relatively low R2s are understandable. SmartPLS path modeling does not provide any global scalar function so that the global validity of the model is a natural issue (Tenenhausa et al. 2005). Recently, Tenenhausa et al. (2005) suggested a global t (GoF)6 measure for PLS path modeling. Following the suggestion, a GoF value of the structure model was obtained. The calculated GoF value is .702, which exceeds the cut-off value of .36 for large effect sizes of R square and allows us to conclude that the model performs well.

6 Discussion and conclusion By incorporating the longitudinal pre-purchase and post-purchase stages, this study provides a theoretical framework combining consumer trust, satisfaction, expectation, and post-expectation and tests the proposed model empirically using Internet consumer behavior data longitudinally collected via two rounds of Web surveys from Korea. There are several ndings of this study. First, in accordance with the results of existing literature including traditional commerce (Armstrong and Yee 2001; Flaherty and Pappas 2000; Liu and Leach 2001), the empirical ndings suggest that consumers trust has a positive inuence on consumers satisfaction. In general this implies that the more consumers trust the seller, the more they are likely to be satised. In turn, consumer satisfaction affects consumers post-expectation and their future behavioral intention such as repurchase intention. An interesting note from Hart and Johnson (1999) regarding the trust-satisfaction relationship is that the relationship between consumers trust and satisfaction can easily be broken when a trust defect is committed. They mention that a trust defect is anything that distracts from the trust a customer feels for an organization, its people, and its products (p. 12). Trust defects result in erosion of a companys trust equity. The customer
q GoF Communality R2 , in line with the effect sizes for R2 (small: .02; medium: .13; large: .26) prposed by Cohen (1988), Tenenhausa et al. (2005) suggested following GoF criteria for small, medium, and larger effect sizes of R2; GoFsmall = .1, GoFmedium =.25, and GoFlarge = .36. .
6

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will feel betrayed and therefore become very dissatised with the company. Singh and Sirdeshmukh (2000) reinforced this concept by making the proposition: the direct (negative) inuence of distrust will exceed the direct (positive) effect of trust on satisfaction. Thus, the relationships (distrust ? disconrmation ? dissatisfaction) are an interesting issue to be investigated in the electronic commence context. Second, the results show strong relationships between perceived performance and conrmation and between conrmation and satisfaction. These relationships indicate that the fulllment of consumers expectation is essential to consumers satisfaction. Third, the results of this study mostly support ECT and PAMs contentions that satisfaction and post-expectation (i.e., perceived usefulness) are strong predictors of consumers continuance (repurchase) intention. These ndings conrm that customers satisfaction and perceived usefulness as post-expectation belief will lead to repurchase intention. Forth, from above ndings we identify a sequential relationship i.e., consumer trust ? expectation ? conrmation ? satisfaction ? post-expectation ? repurchase intention across pre-purchase and post-purchase stages is shown in the study. The study has several implications. From a theoretical perspective, this study attempts to bridge several theories including social exchange theory, expectationconrmation theory, and post-acceptance model in IS continuance from longitudinal lens in the context of e-commerce. This effort provides a holistic view of consumers online transaction across pre- and post stages through expectationconrmation process and repurchase process. Second, this study provides a theoretical framework explaining the subsequent relationships of trust, satisfaction, and repurchase intention following the pre-purchase and post-purchase stages. Third, signicant and positive relationships are detected between consumers trust and expectation, and between satisfaction and post-expectation. This suggests the more the consumers trust an e-vendor, the higher the expectation they have at the pre-purchase stage; the more the consumers satisfy with previous transaction, the higher the post-expectation they perceived at the post-purchase stage. This implies that trust and expectation are important factors in online consumers decisionmaking process at pre-purchase stage; satisfaction and post-expectation are also important predictors of continuance intention at post-purchase stage. However, these relationships are yet to be well studied in the literature. Thus, this study provides a starting point for the future investigation on these relationships. From a practical standpoint, the important roles of trust, satisfaction and postexpectation are highlighted in the study. Building consumer trust is obviously the most essential mission for the e-vendors since a consumers purchasing decision is considered as trust-related behavior (Jarvenpaa et al. 2000; McKnight et al. 2002b; Urban et al. 2000). This study also indicates that the satisfaction level of current online consumers and their perceive post-expectation (i.e., perceived usefulness) are strong indicators that these consumers will continue to purchase and could increase the frequency of their purchasing. This will make consumers are moving away from a single transaction relationship to an ongoing trust-relationship which preserves more stable long-run business for online business rms. Like other studies, this study suffered from several limitations that also create opportunities for future studies. First, although this study justied the use of student

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sample for the purpose of testing the two-phase longitudinal model, they may not be representative of whole e-commerce consumers. In addition the data were collected in Korea. Since Korea ranks the rst in the deployment of nationwide broadband Internet and its rate of adoption far exceeding that of other countries (ITU 2005; OECD 2004), the interpretation and generation of the ndings in other groups of consumers should be made with care. Third, inconsistent with previous empirical results of ECT, the relationship between expectation and satisfaction is not supported by this study. Future research may help further clarify this relationship.
Acknowledgments This study is supported in part by the Faculty Research and Support Fund (FRSF) (Award #955) of the University of Houston-Clear Lake.

Appendix 1 See Table 4.

Table 4 Demographic characteristics of respondents Characteristics Age Gender Male Female Products to buy Books/magazines Computer hardware Computer software Clothing/shoes CDs/tapes/albums Travel arrangements (e.g. airline tickets) Home electronics/appliances Concerts/plays Others Money spent on this purchasing Frequency of Internet purchases in last year How many years using the Internet Experience on computer (1-novice/7-expert) Experience on the internet (1-novice/7-expert) 44 15 9 39 13 9 11 19 23 22.1 7.5 4.5 19.6 6.5 4.5 5.5 9.5 11.6 $47.53a (50,076Won) $39.43 (47,320 Won) 3.08 3.76 4.06 4.66 3.03 1.65 1.23 1.67 87 68 56.1 43.9 Frequency Percentage Mean 21.87 S.D. 2.21

Note Missing data are not counted in frequency The currency conversion is applied as 1,200 Korean Won converted to 1 US Dollar

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Appendix 2 See Table 5.

Table 5 Constructs and measurement items Constructs Measurement items I generally trust other people I generally have faith in humanity I feel that people are generally reliable This site is trustworthy This website vendor gives the impression that it keeps promises and commitments I believe that this website vendor has my best interests in mind How would you rate your overall expectations regarding the quality of the purchasing (process) from this website How well does the website t your personal requirements needs? How would you rate your expectations that things would go wrong in buying from this website?

Consumer trust propensity Q1 Q2 Q3 Consumer trust Q4 Q5 Q6 Expectation Q7 Q8 Q9 Perceived performance

Q10 Using this website improved my performance in shopping Q11 Using this website increased my productivity in shopping Q12 Using this website enhanced my effectiveness in shopping

Conrmation

Q13 My experience with using this website was better than what I had expected Q14 The product and service provided by this website was better than what I had expected Q15 Overall, most of my expectations from using this website were conrmed Q16 The expectations that I have regarding this website were correct

Satisfaction

How do you feel about your overall experience of the Website use: Q17 Very dissatised/very satised Q18 Very displeased/very pleased Q19 Very frustrated/very contented Q20 Absolutely terrible/absolutely delighted

Post-expectation (perceived usefulness)

Q21 Using this website enables me to accomplish a shopping task more quickly than other ways of shopping (i.e., I can improve my shopping performance) Q22 Using this website increases my productivity in shopping (e.g.,. I can make purchase decisions or nd product information within the shortest time frame) Q23 Using this website enhances my effectiveness in shopping (e.g., I can get the best deal or nd the most information about a product) Q24 Overall, using this website is useful in shopping

Willingness to re-exchange

Q25 If I were to buy the same product again, I would likely buy it from this website Q26 I am likely to return to this website for my next purchase Q27 I am likely to make another purchase from this site in the next year Q28 I intend to continue using this website rather than discontinue its use

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