The effects of country of origin and corporate reputation on initial trust

Abstract

Purpose– The purpose of this paper is to investigate the simultaneous effects of country of origin (COO) and corporate reputation on initial trust in a transition economy, and to compare these effects across two service industries. The model broadens COO research by incorporating initial trust as a key driver of success in the context of services internationalization.Design/methodology/approach– Poland is the transition economy studied. A total of 184 respondents evaluated different service combinations (high vs low reputation/home country vs foreign country) in two different service categories (high risk vs low risk). Relationships between constructs are tested, employing a between‐subject experimental design.Findings– Both reputation and the risk level of service have a significant main effect on initial trust. Furthermore, results indicate a highly significant interaction effect: a positive COO effect leads to a higher level of initial trust only in the case of a risky service.Research limitations/implications– As with all laboratory studies, external validity is limited. Further research should focus on other instruments for gaining initial trust (e.g. warranties), especially in the case of a negative COO image.Practical implications– International marketers of services must carefully consider COO information as a means of building initial trust. Positive effects only apply in the case of high‐risk services.Originality/value– A major contribution is the introduction of initial trust as an important mediator in COO‐related international service marketing literature. As a second contribution, COO effects were compared across different service categories with respect to perceived risk. Furthermore, investigating COO effects in transition economies is of particular interest, as such markets are gaining attraction for international service providers.

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