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Cheung2014 Aq
Cheung2014 Aq
To cite this article: Ronnie Cheung (2014) The Influence of Electronic Word-of-Mouth on
Information Adoption in Online Customer Communities, Global Economic Review: Perspectives on
East Asian Economies and Industries, 43:1, 42-57, DOI: 10.1080/1226508X.2014.884048
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Global Economic Review, 2014
Vol. 43, No. 1, 42–57, http://dx.doi.org/10.1080/1226508X.2014.884048
ABSTRACT This study focuses on the information adoption behaviours in online communities,
and investigates how such behaviours affect the purchase intention of consumers. A research model
was constructed to investigate the impact of electronic word-of-mouth on information adoption in
online customer communities. A survey was conducted using a sample of 100 respondents and a
partial least squares approach was used to validate the research model. The research results
concluded that timeliness and comprehensiveness of information, trustworthiness and quality of
information have positive influence on information usefulness, which in turn predicts the consumer
purchase intention.
1. Introduction
The web has created the opportunities for electronic word-of-mouth (eWOM)
communications through electronic media, such as online discussion forums, electronic
bulletin board systems, newsgroups, blogs, review websites and social networking sites
(Goldsmith, 2006). It allows consumers to obtain information related to goods and
services and facilitates a geographically dispersed group of people to share their
experiences with relevant products or services (Ratchford et al., 2001). A recent survey
found that most consumers perceive online opinions to be as trustworthy as branded
websites (AC Nielsen, 2007). Rowley (2001) also proposed that commercial enterprises
should try to organize online communities rather than just relying on other channels.
Online consumer discussion forums provide an effective medium for users to share
their opinions online. This results in a new wave of word-of-mouth (WOM)
communication (Evans et al., 2001), which is an appealing channel for advertisers
and marketers. The eWOM communication refers to the type of statements
accessible online, which are made by potential, actual or former customers about a
Correspondence Address: Ronnie Cheung, International Graduate School of Business, University of South
Australia, City West Campus, 70, North Terrace, Adelaide, SA 5000, Australia. Email: ccheung@acm.org
to three years. People are spending much more time on discussion forums such as
Uwants and HK Discuss. The Internet is becoming a fast emerging platform for
consumers, advertisers and marketers in Hong Kong to communicate with each
other. Therefore, it is important to analyse consumers’ information adoption
behaviours in online customer communities, and investigate how such behaviours
affect the purchase intention of consumers. The rest of this paper is organized as
below. First, we provide a literature review relating to eWOM and online customer
communities. Second, the research framework is presented, followed by a discussion
on the hypotheses for this study. Third, data collection and data analysis are
presented. Next, we summarize the findings and provide a discussion on the research
implications and the practical implications. Finally, the conclusions for this study are
presented.
2. Literature Review
The interactivity of the Internet provides an opportunity for consumers to
communicate directly with others to share information. Discussion forums and
chat sessions are said to be more effective than traditional means of communications.
The ability of the Internet to deliver and obtain information in a flexible, effective
manner at relatively low costs is very attractive. Calisir (2003) conducted an in-depth
study on the perceived position of the web as a communication medium compared
with other media from the perspective of young consumers. The research results
showed that young people perceived the web to be the best medium for guiding
consumer purchase decisions, and to provide a reliable source for information.
Therefore, to develop effective media-selection strategies for marketers, it is necessary
to investigate information adoption models for online communities.
Since the eWOM communication channel provides a new medium for information
exchange to a wide audience, the effect of such communication may vary from
person to person. It is therefore necessary to study the information adoption process,
and investigate theories to explain the effects of information adoption on consumer
purchase decisions. According to Sussman and Siegal’s (2003) information likelihood
model for online environments, attitude and behaviours are affected by online
messages in two ways: centrally and peripherally. The central influences that are
provided by online messages refer to those that directly relate to the contents of the
44 R. Cheung
messages (Petty & Cacioppo, 1986). Therefore, the information adoption model
should first consider information quality as the central influence. On the other hand,
such kind of influence can also be provided peripherally independent of the contents
and quality of the online messages. Therefore, the credibility or trustworthiness of the
information source is another factor affecting information adoption behaviours in an
online environment (Sussman & Siegal, 2003).
In addition to information quality and trustworthiness of the information source,
researchers also considered other characteristics of the web in the information
adoption models. In an online environment, information relating to products and
services are readily available through online communities and web search facilities.
Consumers are faced with lots of information through the web for supporting their
purchase decisions. Therefore, consumers tend to concentrate on identifiable
attributes that help them to concentrate on the essential online messages by
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3. Research Framework
With reference to the related studies in the literature, a research framework is
developed (as shown in Figure 1) for this study. It is based on the important
dimensions of eWOM for information adoption, namely, quality, relevance,
timeliness and comprehensiveness, together with the trustworthiness of the informa-
tion source. The research model is constructed based on the influence of the key
dimensions of eWOM on consumer purchase intention, and considers the mediating
effect of information usefulness on the relationships. There have been a limited
number of studies relating to eWOM in Chinese online communities, and this study
seeks to fill the research gap in this research area. Based on the research framework,
five hypotheses are developed. The information relating to the source of literature for
the constructs is summarized in Table 1.
3.1. Trustworthiness
Trustworthiness is defined as the extent to which an information source is perceived
to be believable and trustworthy by information recipients (Petty & Cacioppo, 1986;
Sussman & Siegal, 2003). It refers to the credibility of the information source.
Information Adoption in Online Customer Communities 45
Trustworthiness
H1
Timeliness and
comprehensiveness H2 H5
Information Purchase
H3 usefulness intention
Quality
Relevance
H4
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3.3. Quality
According to Park et al. (2007), information quality is an important measure that
affects consumers’ attitudes in online communities. The quality of information is
determined by the contents of the online messages, which is important for
information adoption in an online environment.
3.4. Relevance
The relevance of messages is important as most Internet users are conscious of their
time. Users want to find the information that they want quickly and with little effort,
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in order to match their topics of interest quickly (Nah & Davis, 2002). Dunk (2004)
also suggested that the relevance of the information is an important element for
providing the support to aid decision-making.
According to Madu and Madu (2002), if the website is not updated consistently, the
website cannot serve as the expected source to deliver comprehensive information to
the user. Therefore, the more timely and comprehensive information provided by the
website, the higher is the perceived usefulness. Thus the hypothesis of this study is
stated as:
Relevance of messages is important as most Internet users are conscious of their time.
Users want to find the information that they want quickly and with little effort while
they surf through the Internet (Dunk, 2004). It is therefore important to provide
relevant information for the consumers, so that only the most appropriate informa-
tion is provided. According to Dunk (2004), relevance is an important element in
decision-making. The more relevant the information source, the higher the perceived
usefulness of the information source. Therefore, the relationship between information
relevance and information usefulness is hypothesized as follows:
According to Davis (1989, 1993), perceived usefulness has a direct effect on the
attitude towards adoption in a computer-mediated environment. In an online
community, the usefulness of the comments would therefore has a positive effect
on the purchase intention of consumers for the relevant products. Therefore, the
resulting hypothesis is as follows:
(2002). Finally, the questionnaire items for trustworthiness were adapted from Petty
and Cacioppo (1986). Each construct was measured using multiple indicators in
order to capture the underlying theoretical dimensions effectively (Premkumar &
Ramamurthy, 1995). For each variable relating to these measures, respondents were
asked to indicate the agreement of each statement using the six point Likert scale
ranging from “1-strongly disagree” to “6-strongly agree”. The questionnaire was
divided into three sections. Section one focused on items that solicited demographic
information, including age, gender, education level, occupation and monthly income.
The items in section two focused on the consumer’s participation in customer online
communities and the items in section three included all the constructs used in the
research framework. In order to enhance the validity of the constructs, pre-testing
was conducted to modify the questionnaire before conducting the survey. Fifteen
copies of the questionnaire were randomly distributed in the pilot test, which resulted
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5. Data Analysis
Structural equation modelling (SEM) is a statistical technique for measuring latent
and unobservable concepts through multiple observed indicators (Chin, 1998b;
Jöreskog, 1989). Partial least square (PLS) technique is a common statistical analysis
in SEM, and it can be used to validate the constructs of an instrument, test and
confirm the structural relationships among the constructs (Chin, 1998a; Gefen et al.,
2000). Jöreskog and Wold (1982) suggested that PLS is better suited for theory
development, whereas linear structural relationship (LISREL) analysis is suitable to
be applied for confirmatory analysis. This is because confirmatory analysis requires a
more stringent distributional assumption and a large sample. This study used PLS
because its premises are less limiting and the sample size in this study was relatively
small. SmartPLS 2.0, a statistical software application for PLS-based path modelling,
was applied to measure the causal relationships in the proposed model.
Sub-degree 29
Bachelor's degree 45
Master or above 5
2000 or below 25
Monthly income
1001–5000 20
5001–8000 15
8001–11,000 21
11,001–14,000 5
14,001–17,000 5
17,001–20,000 5
20,001 or above 4
Employment status
Full-time 48
Part-time 11
Self-employ 3
Student 38
part-time, their personal incomes were below $2,000. For full-time employees, a
majority of respondents fell within the monthly salary range $8,001–$11,000.
Average
variance Composite
Factor extracted reliability Cronbach’s
Constructs Indicators loadings t-value (AVE) (CR) alpha (α)
Trustworthiness TRUST1 0.78 16.71 0.68 0.87 0.77
(TRUST)
TRUST2 0.85 15.54
TRUST3 0.85 37.55
Purchase INT1 0.91 68.03 0.72 0.88 0.80
intention (INT)
INT2 0.80 14.38
INT3 0.83 23.65
Quality (QUAL) QUAL1 0.87 34.67 0.57 0.84 0.74
QUAL2 0.84 26.26
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composite reliability and AVE. The Cronbach’s alpha scores ranged from 0.74 to
0.88, indicating that all constructs have Cronbach’s alpha scores greater than the
recommended minimum level of 0.7 (Hair et al., 2010), and that they exhibit strong
internal reliability. The composite reliabilities of the constructs ranged from 0.84 to
0.92, again with all values above the recommended level of 0.7. The AVE values,
ranging from 0.57 to 0.80, were greater than the variance due to measurement error.
A confirmatory factor analysis was also conducted to test the convergent validity of
each construct. The analysis showed that all the items have factor loadings higher
than 0.5 in the confirmatory factor analysis (above the recommended minimum
value). Furthermore, each indicator’s loading was found to be higher than all its
cross-loadings. Therefore, all the conditions for convergent validity were met.
A rule for assessing the discriminant validity requires that the square root of the
AVE to be larger than the correlations between the construct and any other construct
in the model (Chin, 1998b). In Table 4, the diagonal entries (in bold) represent the
square root of the AVE for each construct. All other entries represent the
corresponding correlation coefficients among the constructs. As shown in Table 4,
all constructs met the minimum requirements. Therefore, all constructs in the model
displayed adequate discriminant validity.
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Note: Bold values represent the square root of the AVE for each construct.
52 R. Cheung
Trustworthiness
0.13*
Timeliness and
0.44***
comprehensiveness
0.68***
Information Purchase
0.32*** usefulness intention
Quality
0.10
Relevance
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Figure 2. The structural model and the path coefficients. *p < 0.05, ***p < 0.001.
Hyp/
Path β T Sig. R2 Sig.
Information usefulness – >purchase intention 0.68 14.21 *** 0.46 H5/Yes
Trustworthiness – > information usefulness 0.13 2.13 * 0.69 H1/Yes
Quality – >information usefulness 0.32 4.00 *** H3/Yes
Relevance – >information usefulness 0.10 1.29 H4/No
Timeliness-comprehensiveness – >information 0.44 5.57 *** H2/Yes
usefulness
explained 46% (R2 = 0.46) of the variance in the intention construct, indicating a
high overall R2 value. Usefulness of information was predicted by trustworthiness,
timeliness and comprehensiveness, and quality of information, together, these
variables explained 69% (R2 = 0.69) of the variance in information usefulness. The
relevance of information does not bring any significant impact on the usefulness of
information and H4 was rejected.
The exogenous variables in the research model explained large amounts of
variance of information usefulness (R2= 0.69). The R2 value can be divided based
on the path coefficients and correlations between the dependent and explanatory
variables (Tenenhaus et al., 2005). According to Tenenhaus et al. (2005), the value of
R2 for information usefulness may be decomposed in terms of the multiple regression
coefficients and correlations between the dependent variable and the explanatory
ones as follows:
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X
R2 ¼ bjcorðy; xj Þ ¼ 0:13 0:58 þ 0:32 0:73 þ 0:10 0:54 þ 0:44 0:76 ¼ 0:69
6. Discussion
This study has identified the key dimensions of information adoption for eWOM
communities. Based on the information adoption model, a research model was
constructed for this study. In this study, there are several factors that are identified to
have a significant positive influence on the usefulness of information in online
customer communities. These include information trustworthiness, quality, timeliness
and comprehensiveness of information. Among these factors, the timeliness and
comprehensiveness of information was found to contribute to the largest amount of
variance in information usefulness. This is in line with previous research results from
Cheung et al. (2008), which posited that information is considered to be useful if
comprehensive and complete information was provided through the online message
contents. Trustworthiness was found to have a positive significance influence on
information usefulness. This is in line with the previous research results from Bickart
and Schindler (2001), which indicated that the trust on the information source has a
7. Conclusions
In this research, a quantitative study was conducted using a sample of 100
respondents. A path analysis was conducted using PLS techniques to investigate
the impact of eWOM on the information adoption behaviours in online customer
Information Adoption in Online Customer Communities 55
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Relevance
The messages in the online customer communities are relevant.
The messages in the online customer communities are appropriate.
The messages in the online customer communities are applicable.
Trustworthiness
The messages in the online customer communities come from a creditable source.
I have confidence on the believability of the message source.
The messages in the online customer communities come from a trustworthy source.
Timeliness and comprehensiveness
The messages in the online customer communities are current.
The messages in the online customer communities are timely.
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