Contributions of social capital theory in predicting rural community inshopping behavior.(Statistical Data Included)

N.J. Miller (*)

Abstract

The social environment in which the retailer conducts business is not often measured for its fundamental influences on consumers' local purchasing behavior. This study, using social capital theory as a theoretical framework, examines whether reciprocal actions exist between community members as consumers and retailers and if these actions are persuasive in predicting the economic activity regarded as consumer inshopping. Determinants of inshopping behavior are analyzed from the community member's perspective in a study of the rural community marketplace. The sample population consisted of consumers living in two rural Iowa communities with populations less than 10,000, agricultural-based economies, and retail mixtures of locally owned and operated small-sized businesses as well as national chain and discount organizations. Structural equation modeling estimated the causal patterns among consumers' attachment to community with two endogenous variables regarding reciprocity and inshopping behavior. Findings of fer supporting evidence that social relationships aid in predicting rural marketplace relationships. [C] 2002 Elsevier Science Inc. All rights reserved.

1. Introduction

Rural market environments are noted for the increasing number of businesses that are failing to thrive or survive (Stone, 1995; Strange 1996). Especially devastating to the small-sized independent retailer has been an omission in considering the unique social as well as economic factors inherent in the rural community environment. Competition from larger regional markets and discount chain stores has enticed local residents to spend their dollars beyond their community market. Under these circumstances transaction costs arise because local retailers sustain losses in both sales dollars and trust in their community's support, and the community as a whole forgoes sales tax dollars that could be used for improving local services.

Consumer behavior research examining why consumers leave their community to shop has found that dissatisfaction with local retailer products and services often leads consumers to outshop (Riecken & Yavas, 1988; Samli, Riecken, & Yavas, 1983). Younger residents and higher income groups are closely associated with outshopping but mixed results can be found for demographic variables involving tenure of residence in the community (Thompson, 1971), or residents' life-cycle stage (Herrmann & Beik, 1968). Attempts to predict outshopping behaviors have generally reported weak relationships and a lack of generalizability across a variety of product categories (Hozier & Stem, 1985). This suggests the existence of another set of related attitudinal variables which have yet to be evaluated.

Shopping within the local community marketplace is called inshopping. Inherent in many of the previous studies is the belief that by applying outshopping findings retailers can develop marketing strategies for increasing local inshopping behavior. It is not known if this is a correct assumption or if varying levels of inshopping results from other forces not yet examined. The purpose of this study was to examine determinants of rural consumers' inshopping behavior, testing social capital's theoretical constructs of community attachment and reciprocity.