135 Latin American Advances in Consumer ResearchVolume 2, 2008

Perceived Influence of Online Reviews: A Comparison of Korea and USCheol Park, Korea University, Korea

ThaeMin Lee, Chungbuk National University, Korea

EXTENDED ABSTRACTThe Internet is changing the nature and power of WOM (word-

of-mouth) communications (Ward and Ostrom 2002). The adventof the Internet has extended consumers options for gatheringunbiased product information from other consumers and has providedthe opportunity for consumers to offer consumption-related adviceby engaging in electronic word-of-mouth (e-WOM) (Hennig-Thurauet al. 2004). Online consumer review is one of the important sourcesof e-WOM communication (Chatterjee 2001). Online consumerreview means information on, comments about, and evaluations ona company, product, and service on the Internet by the consumers,themselves. Almost all Internet shopping sites around the worldhave consumer reviews about goods or sellers. There are a lot ofonline communities of consumer reviews. Online consumer reviewsbecome important for marketing communication because manyconsumers consider searching online reviews as the first step ofshopping.

The purposes of this research were to examine some researchquestions on how consumer characteristics affect attitude towardonline reviews; what the relationship is between online reviewattitude and online review usage frequency; which online reviewattitudes and usages have significant effects on purchase decisions;and are there any cross-cultural differences in these structuralrelationships. To address these research questions, we developed astructural e-WOM effect model and investigated the structuralrelationship on a cross-cultural basis.

HypothesisThe hypothetical model was developed based on a consumer

characteristics-attitude-outcome framework. We proposed twovariables of consumer characteristics: consumer susceptibility tointerpersonal influence (CSII) (psycho-graphical characteristics)and the Internet shopping experience (behavioral characteristics).We assumed that these consumer characteristics affect attitudetoward the online reviews (perceived usefulness). We hypothesizedthat attitude toward online reviews related to two kinds of outcome:usage frequency and purchase influence. We assumed that if apositive attitude toward an online review increased the usage levelof the online review, then the purchase decision would be influencedmore by the online review.

H1: Consumer susceptibility to interpersonal influence ispositively related to the perceived usefulness of onlinereviews.

H2: The Internet shopping experience is positively related tothe perceived usefulness of online reviews.

H3: The Internet shopping experience is positively related tothe usage frequency of online reviews.

H4: Perceived usefulness of online reviews is positivelyrelated to the usage frequency of online reviews.

H5: Perceived usefulness of online reviews is positivelyrelated to the purchase influence of online reviews.

H6: The usage frequency of online reviews is positivelyrelated to the purchase influence of online reviews.

H7: There are cultural effects in the proposed model.

METHODData was collected through personal interviews with (under)

graduate students and business workers in Seoul (for the Koreansample) and in Nashville, Tennessee (for the U.S. sample). Thefinal sample size was 877 (508 men : 57.9% and 369 women :42.1%). The Korean sample consisted of 274 men (60.6%) and 178women (39.4%) and the U.S. sample consisted of 234 men (55.1%)and 191 women (44.9%). In the Korean sample, 15.2% were in theirteens, 75.1% were in their twenties, and 9.7% were over thirty yearsold. In the U.S. sample, 23.2% were in their teens, 64.9% were intheir twenties, and 11.9% were over thirty years old.

Consumer susceptibility to interpersonal influence (CSII) wasmeasured using 3 items on a five-point agreement rating (1=strongly disagree, 5= strongly agree; the five-point scale was usedfor all subsequent items, unless otherwise noted). Perceivedusefulness of online review was measured in agreement with thefollowing four statements adapted from Davis et al. (1989). Usagefrequency and perceived influence of online reviews of onlinereviews was measured by agreement with the each three statements.

RESULTSAlthough the chi-square values for this model were significant

for both the Korean data (184.422 with 59 degrees of freedom [d.f.],p=.00) and the U.S. data (161.473 with 59 d.f., p=.00), this statisticwas sensitive to sample size and model complexity; as such, thegoodness-of-fit index (GFI), Tucker-Lewis index (TLI), andcomparative fit index (CFI) was more appropriate for assessingmodel fit in this case (e.g., Bagozzi and Yi 1988; Bearden, Sharma,and Teel 1982). The overall fit of both data sets was excellent withsufficiently high values in the goodness-of-fit index (GFI) (.94 forthe Korean data and .95 for the U.S. data), in the comparative fitindex (CFI) (.96 for the Korean data and .98 for the U.S. data) andthe Tucker-Lewis index (TLI) (.95 for the Korean data and .97 forthe U.S. data) and a low root mean square error of approximation(RMSEA) (.07 for the Korean data and .06 for the U.S. data).

The entire set of items was then subjected to multigroup CFAanalysis, which was a more rigorous way to assess unidimension-ality and cross-national equivalence of measures. The full metricinvariance was not supported, as the chi-square difference betweenthe non-restricted model and the full metric invariance model wassignificant (c2d (13)=41.195, p.10). Table 3 presentsthe procedure and results. This partial invariance model was usedin subsequent analyses.

National-level analysis of structural modelThe structural model was first estimated independently for the

Korean and U.S. samples. The unstandardized estimates of thestructural parameters resulting from the separate estimation of themodel for Korea and U.S. are provided with t-values and fit indices.The majority of path coefficients were statistically significant(p

136 / A Comparison of Korea and USseparately. We performed multigroup analysis to test for similaritiesand differences in the structural relationships across the two countries.A significant difference would imply that the path coefficient wasstatistically different across the two groups.

General Results of Hypothesis TestingH1, H2, H4, H5 and H6 were fully supported. However, H3 was

supported only in the Korean sample. Thus, H3 was partiallysupported. Multigroup tests (H7) revealed significant differences inthe four path coefficient between the two countries.

DISCUSSION AND CONCLUSIONThis study contributes to the understanding of factors

influencing the effect of online consumer reviews. The maincontribution is the specification, justification, and empiricalvalidation of a set of interrelationships among consumercharacteristics (consumer susceptibility to interpersonal influence,the Internet shopping experience), attitude toward online reviews(perceived usefulness of online reviews) and outcomes of onlinereviews (usage frequency and purchase influence of online reviews).Most importantly, this study integrates a cultural effect thatsignificantly moderates key relationships in the proposed model,reflecting the growing importance of online marketingcommunication in a global setting. The integration of cross-culturaldifferences as moderators of key antecedents of the effects of onlinereviews is the key contribution of this study to emerging cross-cultural online marketing communication literature. This researchis among the first to investigate factors influencing the effect ofonline consumer reviews in the context of cross-cultural comparison.

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