Investigating the effects of information quality on trust and risk in electronic data exchanges

Modern interorganizational business exchanges have evolved from proprietary systems to web-based ordering systems. While these electronic exchanges enhance efficiency and flexibility in interorganizational collaborations, the degree of information quality they provide drives their success. This study examines the influence of information quality on the success of interorganizational data exchnages. Trust in the exchange provider and the degree of risk associated with using the exchange have been found in past research to significanlty influence these effects and this study also examines the distinctive influence of information quality on two dimensions of trust (competence trust and goodwill trust) and risk (exchange risk and relationship risk). As the performance of a data exchange relies on the successful completion of a specific transaction on the spot, this study also examines the extent to which transaction performance affects the model relationships. A simulated web exchange was used in this study to collect data from 221 business professionals. The study's hypothesized relationships were in general supported by the data and the resulting structural model proved to adequate represent the construct relationships. The study provides empirical evidence on the distinctive roles of two types of trust and two types of risk in mediating the relationship between information quality and exchange success. The study provides evidence that information quality has significant influences on both types of trust and risk, but it has a higher influence on competence trust than on goodwill trust, while it also significantly reduces perceived exchange risk. Further, we show that these constructs have distinctive influences on intention to use electronic exchanges. Our findings also demonstrate the important role of transaction performance in mediating the relationships identified in the model. While these findings contribute to IS theory, they also benefit professionals in that they provide insights as to how organizations can deal with the different types of uncertainties related to participating in electronic exchanges. In addition, these findings help demonstrate the importance of interventions in the design of electronic data exchanges and what benefits should be expected by enhancing information quality in those settings.