Understanding consumer online shopping behaviour from the perspective of transaction costs

3.6 HYPOTHESES DEVELOPMENT 
3.6.1 Antecedents of Consumer TCs
 
Ten hypotheses will be developed in this section. The relevant evidence from existing 
literature has been found to support that the identified antecedent variables may affect time 

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and efforts expended on certain stages of online transaction process or pose influences on 
certain types of TCs associated with online transaction process, such as search cost, evaluate 
cost, monitoring cost and adaptation costs, etc., thereby affecting the overall TCs. 
 
3.6.1.1 Consumer-Related Characteristics 
Consumer-related characteristics refer to a consumer’s perception of online shopping 
requirements and his/her previous transaction-related attributes. The antecedents falling in 
this category, including Internet access availability, perceived Internet expertise and online 
buying frequency, are suggested as important to consumer TCs.
Internet Access Availability 
To some extent, Internet access reflects the physical asset specificity which refers to 
investment in special equipment, such as personal computers and modems for the purpose of 
online shopping (Teo
 et al.
2004). Accessibility is an important factor in explaining 
technology use (Mathieson 1991, Venkatesh and Brown 2001), and research suggests that it 
is a central reason why differences in Internet usage exist (Hoffman
 et al.
2000, Porter and 
Donthu 2006).
To complete an online transaction, the potential customer must first have access to a 
computer that has an Internet connection (Cho
 et al.
2003). Consumers in China still have to 
invest a significant amount of time and money to engage in online transactions (White
 et al.
2000). For instance, they buy computer equipment that may be costly and need to pay a high 
connection fee to Internet service providers, which increases the access cost of online 
shopping. With the increase in Internet access availability or the decline in access barriers, 
the Internet tends to be easily accessible in schools or workplaces, providing more 

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opportunities for consumers to browse and purchase at the shopping websites (Porter and 
Donthu 2006), thereby reducing physical asset specificity of online purchase and lowering 
the access cost of online shopping. Based on this reasoning, the following hypothesis is 
proposed:
H1a: Internet access availability is negatively related to a customer’s perceived TCs 
associated with online shopping.
 
Perceived Internet Expertise 
The Internet expertise refers to a consumer’s knowledge of, experience with, and confidence 
in using, the Internet (Montoya-Weiss
 et al.
2003). It is associated with human asset 
specificity which means the investment in time and effort to accumulate online purchasing 
experience. The majority of consumers have to invest time and efforts in this kind of human 
asset because they do not own relevant Internet skills for online purchasing. The extent to 
which consumers are familiar with the usage of Internet skills is viewed as an important 
indicator of online learning efficiency (Van Deursen and Van Dijk 2009). Generally, Internet 
skills can be easily transformed to online purchase process, which are essential to online 
transactions (Livingstone and Helsper 2010), and therefore can lower the human asset 
specificity of online shopping and further reduce the TCs associated with online shopping.
When Internet users have accumulated sufficient Internet skills via their adoption of the 
technology, it will result in a belief in their efficacy for the extension of Internet skills into 
online retail usage for purchasing products. Davis et al. (1989) and Venkatesh and Davis 
(1996) have previously suggested that Internet expertise is an antecedent of perceived ease of 
use, and further demonstrated that Internet expertise is a precursor of online shopping 

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usability and online direct experience. O’Cass and Fenech (2003) contend that Internet 
expertise is invariably a necessary component for use of the Internet for purchasing products.
Empirical studies indicate that the Internet expertise causes a positive reception to the idea of 
online transaction (Bart
 et al.
2005). As online shopping is primarily concerned with using a 
new technological innovation, its adoption is predicated upon the user’s receptive inclination 
toward technological advances. The higher the users’ internet expertise is, the higher their 
receptivity to online shopping, and the more confidence consumers have to use Internet for 
online purchasing. They would have a belief in their capability to search for products online, 
make the payment, and adapt to the online environments, etc. Accordingly, the time and 
efforts expended in the related activities would be reduced. Subsequently, the corresponding 
costs with regard to searching products, ordering, making the payment and adapting to online 
shopping environments would be alleviated. As such, the high level of Internet expertise 
would likely lower consumer perceived TCs of online shopping.
In addition, Internet expertise may create a greater sense of comfort with an online vendor 
and reduce the uncertainties associated with it. Empirical results from various studies tend to 
exhibit that uncertainties (e.g., privacy concerns and product quality concerns) diminish with 
increased Internet expertise (Montoya-Weiss