Privacy calculus model in e-commerce - a study of Italy and the United States

Received: 22 December 2004 Revised: 29 August 2005 2nd Revision: 14 November 2005 Accepted: 21 November 2005 Abstract This study examines cross-cultural differences beliefs related to e-commerce use for Italy and the United States. We argue that for both cultures, the user’s decision to make an online purchase is simultaneously influenced by a set of contrary factors. These include decision facilitators such as propensity to trust and institutional trust, and decision inhibitors such as perceived risk and privacy concerns. We argue that substantial cultural differences exist that affect the above factors and the relationships among them. We use Hofstede’s cultural theory and Fukuyama’s theory of trust and social capital, along with emic factors important for the Italian society, to develop the study’s propositions. The hypotheses were empirically tested using LISREL structural equation modeling and multigroup analysis. The results revealed that the Italian society exhibited lower propensity to trust, institutional trust, privacy concerns, and higher perceived risk. The relationships between institutional trust and ecommerce use, privacy concerns and e-commerce use, and perceived risk and institutional trust are all weaker for Italy. The relationship between perceived risk and privacy concerns is stronger for Italy. The paper’s major contribution is in validating an important model of e-commerce use across two cultures and showing the moderating effects of culture. European Journal of Information Systems (2006) 15, 389–402. doi:10.1057/palgrave.ejis.3000590