Showing papers in "Journal of Applied Business Research in 2014"

The Effects Of Technology Readiness And Technology Acceptance On Nfc Mobile Payment Services In Korea

Abstract: The Near Field Communication (NFC) mobile payment is the integration of NFC enabled smartphones and credit/debit/prepaid cards. Korea is a pioneer in rolling out the NFC mobile payment. Global mobile industries pay attention to whether Korean mobile users accept the new payment service. This study investigates the factors for technology acceptance using an integrated model of technology readiness and technology acceptance. Structured equation modeling is used to analyze the collected data. The four constructs of technology readiness (innovativeness, optimism, discomfort, and insecurity) have significant impact on the perceived ease of use and the two technological characteristics of NFC mobile payment (responsiveness and smartness) also have significant impacts on the perceived usefulness. However, only the perceived usefulness affects significantly on the intention to use. The perceived ease of use affects indirectly on the intention to use through the perceived usefulness. The result of this study suggests that to be a successful payment service, the NFC mobile payment service has to be much more focused on the usefulness against other alternative payment methods.

Volatility Spillovers Between Oil Prices And Stock Returns: A Focus On Frontier Markets

Abstract: Frontier markets are increasingly sought by investors in search of higher returns and low correlation with traditional assets. As such, it is important for financial market participants to understand the volatility transmission mechanism across these markets in order to make better portfolio allocation decisions. This paper employs a bivariate BEKK-GARCH(1,1) model to simultaneously estimate the mean and conditional variance between equity stock markets (twenty-one national frontier stock indices and two broad indices – the MSCI Frontier Markets and the MSCI World) and oil prices. We examine weekly returns from February 8 th , 2008 to February 1 st , 2013 and find significant transmission of shocks and volatility between oil prices and some of the examined markets. Moreover, this spillover effect is sometimes bidirectional.

Are Islamic Equity Indices More Efficient Than Their Conventional Counterparts? Evidence From Major Global Index Families

Abstract: Despite the increasing attention to ethical investments, the empirical studies on Islamic indices are scarce. Our article aims to contribute to the empirical literature by exploring the efficiency of these indices and their potential for diversification in comparison with the conventional benchmarks. We explore the existence of diversification opportunities by studying whether indices are cointegrated or not. Then, the weak-form efficiency level is analyzed by testing the random walk hypothesis using variance ratio tests. Our sample includes Islamic and mainstream indices of four indices families; among them, two Shariah-compliant indices which have not been studied before in the academic literature Our results show that Islamic indices have the same level of (in)efficiency as conventional ones, the indices of MSCI and FTSE families are the less inefficient. In terms of cointegration analysis, Islamic indices of Dow Jones and S&P have no cointegrating relations with their respective benchmarks, which suggests the existence of long-run diversification opportunities.

Women On French Corporate Board Of Directors: How Do They Differ From Their Male Counterparts?

Abstract: Our research aims at exploring individuals characteristics of women on Boards in the French context. In the first part of our paper, we discuss the different theoretical frameworks which supported the business case of gender diversity on Boards of Directors and expose our hypothesis regarding differences in women and men characteristics. The second part presents our methods, measurements and data. Then, we focus on our empirical study. Our sample consists of the French Index SBF 120 companies. We studied the profile of 1,250 directors collecting information from the firms annual reports of year 2010, using various scales defined by previous research on that field in the AngloSaxon literature. Our findings confirm that integrating women on boards has an impact on the Human and Social Capital of Boards but not as much as might have been expected. It is worth noting that men and women board members seem to build their human and social capital through the same educational process in France. Nonetheless, our work shows significant differences between men and women regarding professional experience and board member status.

Performance Of The South African Banking Sector Since 1994

Abstract: This study investigates the impact of bank-specific variables and selected macroeconomic variables on the South African banking sector for the period 1994-2011 using the capital adequacy, asset quality, management, earnings, and liquidity (CAMEL) model of bank performance evaluation. The study employs data in annual frequency from South Africa’s four largest banks, namely, ABSA, First National Bank, Nedbank, and Standard Bank. These banks account for over 70% of South Africa’s banking assets. Using return on assets (ROA) and return on equity (ROE) as measures of bank performance, the study finds that all bank-specific variables are statistically significant determinants of bank performance. Specifically, the study shows that asset quality, management quality, and liquidity have a positive effect on both measures of bank performance, which is consistent with a priori theoretical expectations. Capital adequacy, however, exhibits a surprising significant negative relationship with ROA, while its relationship with ROE is significant and positive as expected. Except for interest rates (in the ROA model), unemployment rate (in the ROA model), and the rate of inflation (in the ROE model), the rest of the macroeconomic variables are statistically insignificant. The study reveals that bank performance is positively related to interest rates and negatively related to unemployment rates and interest rates.

Crowdfunding In France: A New Revolution?

Abstract: In the last few years, small firms have had difficulties to finance their projects via the traditional bank system. A new type of financing has recently appeared in Europe and in particular in France: the crowdfunding. It is a method for funding a variety of new ventures, allowing individual founders of for-profit, cultural, or social projects to request funding from many individuals via Internet. Our paper contributes to the literature by introducing this financial innovation and building a theoretical framework to explain its success. We also discuss some more practical issues to enhance crowdfunding in France.

Corporate Governance, Principal-Principal Agency Conflicts, And Disclosure

Abstract: This study investigates the relation between corporate governance and disclosure quality in a context of principal-principal conflicts and poor investor protection. Overall, the empirical results suggest that minority expropriation risk harms disclosure quality. Specifically, we find that disclosure quality is negatively associated with ownership concentration, major shareholder voting rights, the existence of double voting rights, and family control. The results obtained also evidence a positive relationship between disclosure quality and the existence of executive stock option plans giving support that this mechanism plays a key role in corporate transparency.

Does The Glass Ceiling Exist? A Longitudinal Study Of Womens Progress On French Corporate Boards

Abstract: n this article, we conduct a longitudinal study of womens progress on French corporate boards of directors. We particularly focus on the extent to which women directors have circumvented the glass ceiling. Using a sample of SBF 120 companies over a 10-year period from 2000 to 2009, our results provide evidence of a significant increase in the number of women on French corporate boards. However, the corporate glass ceiling hypothesis is consistently rejected whatever the considered measure of female directors; i.e., the number of board seats held by women, the number of firms with a critical mass of female directors, and the number of directorships held by each women director.

Effects Of Intrinsic And Extrinsic Religiosity On Attitudes Toward Products: Empirical Evidence Of Value-Expressive And Social-Adjustive Functions

Abstract: Religiosity affects various aspects of consumer behavior. This research distinguishes two dimensions: Intrinsic religiosity is lived per se, as a personal and intimate value; extrinsic religiosity is an instrument to attain personal goals by connecting with other people. Intrinsic and extrinsic religiosity likely affect the functions of consumers’ attitudes toward products, both valueexpressive (e.g., to express the individual self) and social-adjustive (e.g., to be accepted by social groups). Intrinsically religious consumers have an inner self defined by their religiosity, so they do not seek social approval. They should have less need for products to express their inner selves or manifest social ties, compared with extrinsically religious consumers. In contrast, extrinsic religiosity may increase both value-expressive and social-adjustive functions of products. Study 1 supports these hypotheses; intrinsic religiosity decreases the value-expressive and social-adjustive functions of consumer attitudes, whereas extrinsic religiosity increases both attitude functions. Study 2 applies these findings to an advertising context and reveals that the purchase intentions of intrinsically religious consumers increase when they view a value-expressive instead of a socialadjustive advertisement. Purchase intentions among extrinsically religious consumers are higher than those of intrinsically religious consumers when they view a social-adjustive advertisement.

Procedural And Distributive Justice As Mediators Of The Relationship Between Interactional Justice And Work Outcomes: An Empirical Study Of The UAE Public Health Care Sector

Abstract: This study examined the direct and indirect effects of different dimensions of organizational justice on organizational citizenship behaviors, and turnover intention in the context of the United Arab Emirates (UAE) healthcare sector. A questionnaire was administered to a random sample of 448 employees working in three different public hospitals in the UAE. The study used descriptive statistics, factor analysis, correlation analysis, and regression analysis to analyze the data. The results revealed that perceptions of the three organizational justice dimensions (interactional justice, procedural justice, and distributive justice) have a direct influence on employees' organizational citizenship behaviors and turnover intention. In addition, the results showed that interactional justice has an indirect effect on both organizational citizenship behaviors and turnover intention through procedural and distributive justice. This study is one of the first empirical studies of its kind to demonstrate the role of procedural and distributive justice as mediators between interactional justice and employees' work attitudes and behaviors. In conclusion, the results of this study indicate that each of the dimensions of organizational justice, which affect employee attitudes and behavior in the healthcare sector, gives us a better understanding of organizational justice and its dimensions and its influence.

Healthcare RFID In Germany: An Integrated Pharmaceutical Supply Chain Perspective

Abstract: Today’s healthcare environments are characterized by a variety of products, services, and associated data and information that are transferred across many healthcare sector participants Pharmaceutical supply chains in particular are one example of fragmented information flows among supply chain participants Pharmaceutical supply chain processes have a crucial influence on medication quality and ultimate patient outcomes When manufacturing problems arise, temperature control cannot be maintained throughout the supply chain, counterfeit medications enter the supply chain, containers are damaged or sensitive medication is improperly transported and stored, the drugs’ effectiveness can be affected and this can result in serious consequences, including patient sickens or even death In this paper, we analyze Radio Frequency Identification Technology (RFID), a technology that can improve communication of data and information, reduce counterfeiting, and enable monitoring of drug quality in pharmaceutical supply chains The study is conducted in the context of an RFID platform implemented in Germany The paper extends and complements previous studies by analyzing the RFID implementation and business value in an end-to-end supply chain process across multiple stakeholders in the pharmaceutical supply chain, from the manufacturer via the wholesaler to pharmacies and hospitals The results confirm that RFID benefits are realized when supply chain processes are changed with the help of technology, but that different supply chain participants have different benefit realization perceptions The analysis further reveals specific types of process changes for each supply chain participant and their corresponding benefits

Risk Management In The Supply Chain: Characterization And Empirical Analysis

Abstract: Along any supply chain, a multitude of more or less critical incidents may prevent a company from obtaining the expected level of logistical performance. Knowing how to anticipate and manage supply chain risks is therefore an important approach to maintain a competitive advantage. The target of this article is to evaluate the impact of the risks in relation to the functioning of a supply chain on its logistical performance. For such needs, a survey was administered with 158 Moroccan manufacturers. The data collected allows to successively measure the impacts of the risks linked to the management of the upstream supply chain, of operational risks and risks linked to the management of the downstream supply chain on the logistical performance.

Role Of Board Size In Corporate Governance And Firm Performance Applying Pareto Approach, Is It Cultural Phenomena?

Abstract: This paper examines the relationship between board size and firm performance. This relationship is tested in the light of Pareto Approach for Pakistani banking sector. For this purpose a sample of fourteen listed commercial banks of Pakistan are taken for analysis from 2008-2012 on the basis of their performance. Different econometric models are applied to test the relationship between bank performance variables and corporate governance practices in these banks. The results of this study are contradictory with the existing literature of corporate governance variables and firm performance. The most prominent result of this paper is the significant positive relationship between board size and bank performance. It is concluded in the findings that a large board size can enhance the bank performance in Pakistani scenario.

Effects Of RFID Technology On Efficiency And Profitability In Retail Supply Chains

Abstract: Ten years have passed since Wal-Mart’s public announcement about its RFID technology adoption plan in 2003. Some large competitors of Wal-Mart in the U.S. retail industry jumped on the trend of RFID technology adoption. However, there has been a slowdown of RFID technology adoption since 2008. Many U.S. retailers do not consider adopting RFID technology because of the uncertainty of return on investment and the lack of business cases demonstrating its profitability or efficiency. This study investigates whether RFID companies have better financial performance ratios in the U.S. retail supply chains. RFID retailers have significantly lower daysin-inventory and lower per-employee costs. Compared with pre-RFID, the RFID retailers do not improve profit ratios after they adopted it, but their days-in-inventory ratio and sales efficiency improve significantly. Panel data regression analyses show that inventory management efficiency does impact gross margins, but the impact of cost efficiency is negligible. RFID retailers have a positive relationship with gross margin increases. In summary, it could be stated that introducing RFID improves inventory management efficiency but we do not know yet if RFID technology adoption also contributes to profitability in U.S. retail industry.

A Comparative Study Of Smartphone Users Perception And Preference Towards Mobile Payment Methods In The U.S. And Korea

Abstract: As the Smartphone adoption rate increases, Smartphone users pay more attention to mobile payment. There are several options for mobile payment but there is no dominate method. Proximity mobile payment is the newest form of mobile payment. Security, cost, and convenience are three main factors Smartphone users keep in mind when making a mobile payment. This paper investigates Smartphone users perceptions and preferences toward mobile payment methods in Korea and the U.S. U.S. Smartphone users have a willingness to pay more for a secure mobile payment transaction, even though Korean users have more experience in the mobile payment frequency. Among the three factors, mobile security is the factor of strongest influence on mobile payment frequency in both countries.

Customer-Centric Knowledge Creation For Customer Relationship Management

Abstract: As the pace of today’s world increases with advances in technology and globalization, the heat of rivalry and competition in the business world is also rising. It is a wake-up call for many firms that they can no longer just convince customers to buy whatever they sell. They have to understand their customers. Customer Relationship Management (CRM) can assist firms to “know your customer” and “construct good relationships with customers.” In order to know your customer and construct a good relationship, customer knowledge must be acquired and managed. However, this is no easy task since customer knowledge can be subjective and difficult to extract or manage. An approach is needed to acquire and manage customer knowledge. Knowledge management, including knowledge creation, can assist in terms of acquiring and managing customer knowledge. Knowledge management not only improves understanding of the customer, but also improves business process performance by enabling response to customer needs in a timely manner with better quality of service. Customer-Centric Knowledge Creation is the process for the creation of knowledge based on customer knowledge within the CRM contexts which are enterprise-wide, customer-centric, technology-driven, and cross-functional. The aims of this process are to assist organizations to gain more understanding of the customer, embedding customer knowledge into organization knowledge, and creating a customer-focused mindset in organizational members. In other words, it is to sustainably create knowledge focusing on customer knowledge in an organization.

Impacts of website design on the adoption intention of mobile commerce: Gender as a moderator

Abstract: It is necessary for mobile vendors to provide a user-friendly interface for mobile websites due to the limitations of mobile devices, such as small screen size and complexity of use during transactions. However, very few studies have examined the factors influencing the success of mobile websites. This research investigates the influencing factors of website design on the adoption intention of mobile commerce (m-commerce). Researchers have previously examined gender difference in terms of website preference and acceptance of new technology, but the gender difference has been rarely investigated in the m-commerce domain. Therefore, this research also examines how gender as a moderator influences the relationship between website design and the adoption intention of m-commerce. The survey method was used to collect data. Results show that navigation design most significantly impacts consumers' perceived ease of use of mobile websites. It also reveals that perceived ease of use of a mobile website is more important to females when considering their intention to use m-commerce.

The Effects Of Regulation And Supervision On European Banking Profitability And Risk: A Panel Data Investigation

Abstract: This paper studies the effects of regulatory and su pervisory policies on profitability and risktaking for European banks over the period 2005 to 2 011. As these effects may vary according to the banks, we apply the Generalized Method of Mo ments (GMM) for dynamic panels to capture further heterogeneous supervision effects b efore and after the subprime crisis. Accordingly, our findings provide three interesting results. First, strengthening regulations and supervision improves profitability and boosts t he stability of European banking systems. Second, our findings highlight a positive correlati on between capital adequacy, deposit insurance systems and banks’ profitability. Third, we note that stepping up supervisors’ powers reduces risk-taking and promotes banking sta bility.

Persistence Of Performance Using The Four-Factor Pricing Model: Evidence From Dow Jones Islamic Index

Abstract: Despite the increasing attention to ethical investments, the empirical studies on Islamic indices are scarce. The main goal of this article is to investigate whether Dow Jones Islamic Index 100 Titans (DJI100) delivers persistent performance. Using the Carhart (1997) four-factor model, we consider all historical data available from the launching of the index by Dow Jones on September 1999 to March 2011. We study all the firms included in the index and we construct the risk factors (Market premium, size, Book-to-Market, momentum). Our findings show positive performance for momentum strategy and support the idea that ethical investments could under-perform and thus investors accept to pay for their ethics.

Managing Multichannel Strategies In The Service Sector: The Example Of The French Insurance Industry

Abstract: The goal of this paper is to investigate the implementation of multichannel strategies in the service sector and to understand objectives, difficulties faced by companies, synergies and competitive effects among channels, and future areas of investment. The research questions used in-depth interviews with a sample of insurance directors responsible for the multichannel strategy of the major French insurance players.

Free Cash Flow, Growth Opportunities, And Dividends: Does Cross-Listing Of Shares Matter?

Abstract: Corporate dividend policy should strike a balance between paying cash to shareholders when there are excess resources and retaining sufficient resources in the company to fund worthwhile projects. Using excess resources to pay dividends can help to avoid overinvestment by the company in inappropriate projects and/or other potential misuse of funds by managers for their own benefit. However, companies also need to avoid paying too much in dividends to ensure that adequate resources are available within the company to fund projects that could increase shareholder wealth (i.e., to avoid underinvestment). Cross-listing of company shares can improve governance and oversight, which may make the dividend policies of cross-listed companies more likely to avoid both over and underinvestment. Using a sample of Chinese listed companies from 2003 to 2011, we find that cross-listed companies pay higher dividends than non-cross-listed companies when there are excess resources (measured by free cash flow), thereby reducing the potential for overinvestment/misuse of the resources by cross-listed companies. We also find that the dividends of cross-listed companies are lower than those of non-cross-listed companies when there are greater growth opportunities (measure by the market-to-book ratio), reflecting the reduced potential for underinvestment by cross-listed companies. We find more limited evidence that cross-listings may influence the relationship between dividend volatility and free cash flow and growth opportunities. Overall, our results suggest that companies cross-listing their shares have dividend policies that are more responsive than those of non-cross-listed companies to potential shareholder concerns about over and underinvestment.

Examining The Effect Of Change In CEO Gender, Functional And Educational Background On Firm Performance And Risk

Abstract: The purpose of this paper is to examine, within a succession framework, the impact of the change in CEO gender from female to male on firm performance and probability of bankruptcy. We also examine the impact of change in CEO functional and educational background on firm performance and probability of bankruptcy. We use paired sample t-tests and ordinary least squares regression analysis on 46 CEO successions where the outgoing CEO is a female and the incoming CEO is a male. The results show that a change in CEO gender from female to male is associated with an increase in firm performance and a decrease in the firm probability of bankruptcy. Furthermore, the percentage change in firm performance is negatively related to the change in CEO functional and educational background. The percentage change in firm probability of bankruptcy is positively related to the change in CEO functional and educational background. Firm management and board of directors should be aware that there is such a thing as too much change around a succession event and that it has an adverse effect on firm performance and probability of bankruptcy

Family Firms And Corporate Social Responsibility (CSR): Preliminary Evidence From The French Stock Market

Abstract: This paper examines the CSR practices of family firms listed in the French financial market and distinguishes between those managed by a family member CEO and those managed by a competent external CEO. We adopt an exploratory approach and begin with a content analysis of the annual reports from family firms listed in the CAC 40 index during the 2005-2011 period. We then conduct various statistical techniques (e.g., Pearson correlation analysis and ordinary least squares regression analysis) to study the relationships among social performance and family involvement. This paper is the first to provide a preliminary assessment of French family firms’ CSR practices in the current economic context. The study suggests that family firms intensify their CSR efforts during the 2005-2011 period. Our study also reveals that family firms managed by competent external CEOs show better social performance than those managed by family member CEOs. Indeed, the empirical results consistently show a negative and statistically significant association between family involvement and corporate social performance.

Shock And Volatility Transmissions Between Bank Stock Returns In Romania: Evidence From A VAR-GARCH Approach

Abstract: We develop a VAR-GARCH approach to investigate shock and volatility transmissions between bank stock returns in Romania during the 2007-2009 international financial crisis. Our findings provide evidence of significant shock and volatility transmissions between Romanian bank returns. We also show how our empirical results can be used to build effective diversification and hedging strategies.

The Critical Success Factors Of The ERP System Project: A Meta-Analysis Methodology

Abstract: Many articles have been written on enterprise resource planning success in the last two decades in both the public and private sector. An important number of empirical studies attempt to delineate the steps of ERP project integration and their specificities. These research works can be divided into two principal phases: the implementation and the post-implementation. The complex nature of the ERP system and its implementation stages lead us to investigate about the critical success factors mentioned in both phases of integration. Recently, several studies have tried to assess the success of ERP system and highlight the CSF's based on some theoretical models. This study uses a meta-analysis methodology to highlight the principal factors leading to ERP success, and it evaluates the weight of CSF's in the process of implementing the ERP project. Based on the best studies published in the last years about ERP success, we conduct this research to determine the most important factors highly correlated with the ERP success. Eleven CSF's are identified in our meta-analysis and classified according to their significant importance based on the correlation coefficients finding in 32 articles focus only on the ERP system. Some criteria were selected to choose studies such as: Sample size, the availability of correlation coefficient finding (quantitative empirical data), the availability of reliable constructs (Cronbach's alpha), and the measurement scale of each factor.

A Conceptual Model of Linkage Between Innovation Management and Controlling in the Sustainable Environment

Abstract: The main objective of this research is to investigate the role of controlling in the innovation management process respecting sustainability. The question of interest is whether controlling is involved in the innovation management process and how to measure the effectiveness of innovation process using controlling as analytical and informative function and support to the management of the company. Today's approach to strategic management emphasized concept of sustainability and innovation. For that reason there is a need for a broader role of controlling in decision making process, especially for the purposes of efficient measurement system. In order to develop conceptual model of the relationship between innovation management and controlling research is done on Croatian enterprises that has controlling department. The involvement of controlling function in innovation process is analyzed using interview method and results confirmed insufficiently developed linkage between controlling and sustainable innovation management. The conceptual model which is proposed is developed with regard to sustainable innovation process and management performance within which controlling place coordinative and integrative role. A model suggests five stages of the innovation process in which controlling is included as analytical and informative function. Also, a model provides a framework for further elaboration of controlling effectivness, when it is included in innovation management process.

Towards Greater Understanding Of Ecolabel Effects: The Role Of Country Of Origin

Abstract: This research explores the country of origin effect on the evaluation of ecolabelled products. Findings from experimentation indicate that the mention of a country of origin with favorable image in terms of sustainable development has a neutral effect on the evaluation of an ecolabelled product. However, the indication of a country with a negative image affects the product’ evaluation negatively.

Contributions Of Talented People To Knowledge Management

Abstract: This study focuses on major issues of talent management (TM) with respect to knowledge management (KM). Under the effect of the economic paradigm shift toward a knowledge-based economy, multiple human changes occurred and new challenges related to human capital and talent management requires new research in the field. The purpose of the article is to identify what are the contributions of “People hold a Job that require a High Level of Talent” (PJHLT) to knowledge management in terms of contribution to the value chain, to the creation, to the collective effort, to long distance dynamics, to absorption, transfer and learning, to innovation, and to the relationship with customers. This article develops a hypothetic-deductive study on individuals’ self-perception regarding talent requirements at their jobs. We used quantitative data collection in the cluster of Grenoble in France specialized in micro-nano technologies and software. 111 organizations and 566 people contributed to the study. We identified three main findings. First, PJHLT are also more likely to be involved in exploration rather than examination. Second, PJHLT are more likely to be able to absorb, transfer, and learn within long-distance and knowledge-rich dynamics. Third, PJHLT are more likely to be involved in the creation of knowledge rather than in the use of knowledge, which may lead to frustration due to a perception of an unfair distribution of wealth. We identified limitations in our study related to the measurement of subjective variables, the lack of generalization, and the focus on the contribution as one aspect of talent. Addressing an original topic related to both talent management and knowledge management; we finally identify paths for further studies.

Corporate Governance, Voluntary Disclosure, And Firm Information Environment

Abstract: This paper examines the relative performance of several corporate governance factors, specifically the characteristics of boards of directors, managerial ownership, and voluntary disclosure, in improving firm information environments. The paper uses a new empirical approach based on a B-convex method on a sample of 70 non-financial French listed firms belonging to the SBF120 index. Our findings show that 68.57% of our sample firms are located on the efficiency frontier. Corporate governance practices appear to serve as effective monitoring for the top executives of these firms, which reduces information asymmetry between insiders and outsiders, thereby improving the information environment. The empirical analysis also generates evidence that 31.42% of our sample firms lie outside the efficiency frontier. Corporate governance practices in many firms appear insufficient to improve firm information environments. These findings suggest the need for many SBF120 firms to improve their corporate governance practices.

An Investigation Of Perceived Service Quality In Online Shopping: A Hierarchical Approach

Abstract: Online retailing is a new but fast growing phenomenon in many countries around the world. The fast pace at which it is growing is resulting in stiff competition on the online market space. Many firms now realise that they cannot only rely on low prices as a source of competitive advantage and are looking for other effective ways of differentiating themselves so as to attract more customers and enhance their satisfaction with their online stores. This paper investigates online store service quality as a source of competitive advantage for online stores. Data was collected from a total of 201 online shoppers from Gauteng South Africa using a structured questionnaire. The findings show that online store service quality as reflected by platform quality, interaction quality and outcome quality has significant influence on customers’ attitude towards online stores as well as their behavioural response in terms of engagement in positive word of mouth. The findings also show that attitude is not a significant mediator of the relationship between online store service quality and customers behavioural response of positive word of mouth. The findings have wide implications of management of online retail stores and these have been highlighted in the paper.