Contingent effects of firm and employee reputations on professional advice adoption

Eugene Soon Lee Kang () and Shun Yin Lam ()
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Eugene Soon Lee Kang: Nanyang Technological University
Shun Yin Lam: Nanyang Technological University

Service Business, 2017, vol. 11, issue 2, No 6, 345-373

Abstract: Abstract Applying resource-based theory and signaling theory, we argue that firm and employee reputations affect consumer adoption of advice offered by professional service providers, and these effects are contingent on contextual variables. Our study on brokerage reports in Singapore supports our arguments. We show that reliance on firm (employee) reputation when adopting advice is higher (lower) if the evaluation of an entity is an initial rather than a repeated one. Also, reliance on employee reputation increases with stronger recommendation or when the entity has a business relationship with the advice-giving firm. These findings have implications for advice-giving firms and policy makers.

Keywords: Professional service; Firm reputation; Employee reputation; Resource-based theory; Signaling theory (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11628-016-0312-7

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