Direct and indirect effect of word-of-mouth with the moderation of ethnocentrism

Abstract

Purpose The purpose of this study is to develop a conceptual model to examine the effect of word-of-mouth in the retailing of Chinese consumer electronics in the US. This study aims to show that word-of-mouth affects directly or indirectly consumer trust-loyalty link for Chinese consumer electronics. Design/methodology/approach A research framework was designed to test the direct and indirect relationships with structural equation modelling regarding how word-of-mouth affects consumer trust and loyalty for Chinese consumer electronics in the US consumers. Findings The results indicate that word-of-mouth increases consumer trust directly whereas decreases consumer trust through two types of consciousness (i.e. health and price consciousness), resulting in loyalty. The results also show that ethnocentrism moderates the effect of word-of-mouth. For those with low ethnocentrism, the effect of word-of-mouth on trust exists only in the direct route. Research limitations/implications The result suggests that retail managers need to carefully consider the positive and negative influences of word-of-mouth to build consumer trust and loyalty when promoting Chinese consumer electronics. Further cross-cultural research should be explored to generalize the moderating influence of ethnocentrism on the relationship between word-of-mouth and trust-loyalty link. Originality/value This study contributes to a better and wider understanding of consumer loyalty regarding Chinese consumer electronics by investigating the effect of word-of-mouth and the differential mediating role of multidimensional consumer consciousness with ethnocentrism.

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