Understanding online shopping behaviour using a transaction cost economics approach
by Thompson S.H. Teo, Pien Wang, Chang Hong Leong
International Journal of Internet Marketing and Advertising (IJIMA), Vol. 1, No. 1, 2004

Abstract: Building upon Transaction Cost Economics (TCE) theory, this paper hypothesises that consumers' transaction cost of online shopping is affected by six antecedents: product uncertainty, behavioural uncertainty, convenience, economic utility, dependability, and asset specificity. In turn, transaction cost has a negative relationship with consumers' willingness to buy online. We test the model using data gathered from the USA and China. The results show that behavioural uncertainty and asset specificity are positively related to transaction cost whilst convenience and economic utility are negatively related to transaction cost among US consumers and those in China. Dependability is negatively related to transaction cost among US consumers but not consumers in China. Transaction cost is positively related to willingness to buy online among US consumers and those in China. US consumers perceive less product uncertainty, behavioural uncertainty, asset specificity, dependability, as well as more convenience and economic utility than consumers in China. The implications of the results are discussed.

Online publication date: Sun, 09-Nov-2003

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