Assessing Antecedents of Loyalty in the Industrial Relationship Model: An Examination of Base Model Constituents and Moderators

Abstract

Abstract This paper aims to develop the loyalty model with rational constructs as antecedents and investigate the relevant moderating variables. It is to ensure the authenticity of satisfaction and loyalty in the industrial context by exercising switching costs; moreover, exercising relevant moderators on the model. Partial least squares structural equation modeling (PLS-SEM) is employed to analyze 259 responses in Indonesia's chemical resin markets. The empirical study demonstrates five findings, with the central finding being the authenticity of quality and value as the root of loyalty, not switching costs. Moreover, company reputation, safety, and environmental concerns have the potency to strengthen the link of quality–value; meanwhile, the personal relationship tends to be a predictor of satisfaction and loyalty. The research has a limitation where it is conducted in a developing country; a country such as Indonesia faces a tough challenge to ensure the implementation of safety and environmental regulations. Therefore, the role of safety and environmental concerns might be different in other countries whose stronger law enforcement. The role of personal relationships could also be different in other countries with different cultural backgrounds. The finding implies that chemical firms must keep improving quality aspects and services.