Privacy Concern and Online Transactions: The Impact of Internet Self-efficacy and Internet Involvement

Purpose – This study aims to examine the effects of internet self-efficacy and internet involvement on privacy concern and the effect of privacy concern on the frequency of online transactions. The study also seeks to examine the direct effect of internet self-efficacy and internet involvement on the frequency of online transactions. Design/methodology/approach – A structural equation model was developed to test the hypotheses. The model was tested using the LISREL 8.8 software and both structural and measurement parameters were estimated. Findings – Findings suggest that internet self-efficacy and internet involvement affect privacy concern negatively; and privacy concern, in turn, affects frequency of online transactions negatively. Findings also indicate that the direct effect of internet self-efficacy and internet involvement on the frequency of online transactions is positive. All parameters are significant and in the hypothesized direction. Practical implications – Findings highlight the significance of internet self-efficacy and internet involvement in explaining both privacy concern and online transactions. The negative impact of privacy concern shows strategically why businesses should take measures to protect privacy of consumers and assure them that the information they provide is protected and secure. Originality/value – This research contributes to the debate on privacy concern and adds to the growing body of literature on the impact of privacy concern on online transactions. Both antecedents and consequence of privacy concern are examined in the study