The role of trust in B2B electronic commerce : evidence from two e-marketplaces

Abstract: The primary purpose of the current research has been to examine the roles of interpersonal, interorganizational, and institutional trust in establishing buyer-seller trust in public B2B e-marketplaces (EMP). Interpersonal trust refers to trust within the buyer-seller dyad. Interorganizational trust is trust between organizations, in this case mainly the buying and the selling company versus the e-marketplace. Institutional trust refers to structures that the e-marketplace itself can put in place; for example, the monitoring of transactions. The issue of interest is the role that trust plays in the buyer-seller dyad within the e-marketplace, and how trust in this dyad can be developed; for example through institutional trust-measures. This is an important issue because trust generally is viewed as a necessary ingredient for any successful transaction. Both published research and experience support the perspective that trust is necessary for individuals and companies to adopt the practice and principles of e-commerce, both in B2C and B2B trade. In the current study, the adoption of e-commerce concerns the use of B2B e- marketplaces which are public; that is, they are open to every company. Compared to other risk reducing mechanisms like control, for example through contracts, trust is regarded as a more effective means of enabling transactions between previously unfamiliar buyers and sellers at an e- marketplace. A sufficient number of transactions in turn are desirable and part of liquidity; there must be at least a certain number of members and/or transactions for an e-marketplace to remain viable. To address the study’s research questions, an empirical investigation was conducted which involved a case study at each of two public e-marketplaces. Methodologically, both qualitative and quantitative techniques were used. A research model was developed based upon previous research in both B2C and B2B e-commerce. The research model depicts how the trust antecedents e- marketplace reputation and institutional trust-building measures positively affect trust in both the e-marketplace and the buyer/seller. This trust, in turn, is positively correlated with satisfaction, commitment and intention to do future business. Trust also was hypothesized to lower the buyer’s and seller’s perceived risk of transacting on the e-marketplace. The proposed research model was tested through a survey with buying and selling companies in the two e-marketplaces. Overall, the data support the research model. The study contributes to existing published research by empirically validating the three dimensions of competence, integrity and benevolence, suggesting that buyers and sellers assess the EMP in terms of specific attributes, as opposed to assessing it globally. Likewise, the dimensions of credibility and benevolence are essential components of the trust between a buyer and a seller. The data also suggest that trust in the e-marketplace is associated with perceived risk reduction, and with satisfaction with, and commitment to the e-marketplace. Furthermore, trust in the buyer-seller dyad appears to have a positive impact upon the intention to buy or sell. The data also show that trust can be nurtured primarily through the processes of attribution and prediction. As for managerial implications, management at the two e-marketplaces should devote attention to increasing transparency within their member companies. Measures should be taken to facilitate member companies collecting information about potential buyers or sellers in the e-marketplace.