This paper aims to test the effect of sustainability-driven reputation on purchase intention and willingness to pay a price premium along with the mediating roles of consumer trust and perceived risk.
A structural equation model was used on survey data collected from 660 participants to test the model and corresponding hypotheses.
The results show that sustainability has a positive effect on reputation, which in turn, while enhancing trust, decreases consumers' perceived risk. Further, trust is positively related to purchase intention and price premium, while perceived risk is negatively related to them. Finally, mediation analyses show the mediating roles of both trust and perceived risk between sustainability reputation and consumer behaviour.
This paper makes three major contributions: First, it takes all three dimensions of sustainability into account simultaneously in an empirical study in contrast with the disposition in the academic literature to address each dimension separately. Second, it explores the impact of reputation obtained primarily through sustainability on consumer behaviour. Third, it sheds light on the inner mechanism of the relational outcomes by testing the mediating effect of trust and perceived risk.
