PERCEIVED RISK AND ONLINE PURCHASE INTENTION: THE INTERACTION EFFECT OF TRUST

Abstract

This study is aimed to investigate the relationship between perceived risk and online purchase intention, as well as the moderating role of trust on the mentioned link among the university students in Pakistan. The existing literature has mainly focused on the effects of perceived risk on online purchase intention in the developed countries and oversighted the potential role of trust affecting the relationship between perceived risk and online purchase intention. This research study, thus, bridges these gaps in the literature. Purposive sampling was utilized and data was collected from 200 enrolled students through questionnaire. Results of the regression analysis demonstrated that perceived risk in online shopping is adversely related to purchase intention. Moreover, results of hierarchal regression analysis indicated that trust positively moderates the link between perceived risk and purchase intention, indicating that trust dampens the mentioned link. This study provides significant implications to online sellers to understand the underlying role of trust in reducing the perceived risk of consumers and encouraging them to engage in online shopping. This study also suggests the policy makers to devise clear, transparent and uniform policies regarding product return by consumers, product damages and exchange etc so that online businesses flourish and consumer may get benefit of ease, convenience, economy and satisfaction in the online shopping. Limitations and future research directions are provided.