The Role of Trust in B2B Electronic Commerce - Evidence from Two e-Marketplaces

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 electronic commerce, both in business-to-consumer (B2C) and business-to-business (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 to join. Compared to other risk reducing mechanisms like control, for example through written 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. ii 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 that trust in the e-marketplace is correlated with perceived risk reduction, satisfaction, and commitment …