Market signals: web site investment and physical store existence

Purpose – Reputational beliefs influence online purchase intentions but are difficult to establish in settings in which counterfeit products are common, especially in emerging economies. Drawing upon signalling theory, this work decomposes reputational beliefs into: an ability belief, as represented by web site investment, and a truthfulness belief, as signalled by a statement about the existence of a physical store, and investigates their differential effects on online purchase intentions. This work aims to further investigate the moderating effects of searchers' personality type on the relationships between reputational beliefs and online purchase intentions. Design/methodology/approach – Three experiments using various samples (students versus non-students) and products (cell phone versus camera) were conducted. Findings – The results reveal that two significant market signals, web site investment and a statement about physical store existence, influence reputation beliefs, and, thus online purchase intentions. Moreover, aggressive searchers' online purchase intentions depend on their ability belief rather than their truthfulness belief, whereas non-aggressive searchers' intentions rely on their truthfulness belief rather than their ability belief. Originality/value – This work provides new theoretical insights into factors influencing consumers' online purchase decision making by decomposing reputational beliefs and incorporating the moderating effect of personality type. It contributes to signaling literature by examining the effects of two market signals – web site investment and statement about the existence of a physical store – on two major components of reputational beliefs and online purchase intentions. This article is the first to empirically test the effects of reputational beliefs from the perspective of end-users in an online context.