Signalling trust: supplier communication, buyer risk propensity, and e-marketplace engagement among B2B SMEs

Abstract

In this study, we investigate how signal consistency and credibility of e-marketplace suppliers' communication content influence small and medium-sized enterprises' (SMEs) buyers to form trust in the suppliers and continue to engage with them on the e-marketplace platform. Grounded in the signalling theory, we hypothesize that signal consistency and signal credibility in an e-marketplace supplier's communication positively influence a prospective SME buyer's trust in the supplier, which in turn enhances the prospective buyer's engagement with the e-marketplace supplier. We also hypothesize the substitution effect (i.e., negative interaction effect) of the supplier's signal consistency and signal credibility, as well as the moderating roles of the buyer's risk propensity, in the complex relationships among these constructs. Using a vignette-based experiment with 302 SME decision-makers in Thailand, this study reveals the direct effect and the indirect effect, through buyer trust, of the supplier's signal consistency (i.e., consistent vs. inconsistent signals) and signal credibility (i.e., presence vs. absence of credibility in the supplier's signals) on the buyer's engagement with the supplier. The experimental results also support the hypothesized substitution effect of signal consistency and signal credibility and the moderating effects of buyer risk propensity. The theoretical and managerial implications of this study are also discussed.