Understanding and mitigating risks in social commerce: an empirical study from the perspective of signalling theory

This paper constructs a risk reduction model based on signalling theory to investigate how the platform- and user-oriented signals affect perceived risks, which in turn affect users' actual engagement and purchase behaviours in social commerce. The moderating effects of perceived effectiveness of social commerce institutional mechanisms (PESIM) on the relationships between signals and perceived risks are also considered. Longitudinal data from 226 users of Xiaohongshu were collected to test the proposed hypotheses. We identify signals oriented from platforms and users significantly influence users' perceptions of commerce and participation risks. We also demonstrate that commerce and participation risks influence users' actual engagement and purchase behaviours, respectively. Furthermore, we also verify that PESIM negatively moderates the relationship between signals and perceived risk.