Consumer privacy concerns in entrepreneurial contexts: Evidence from an online experiment

Abstract

AbstractThe causal link between customer privacy concerns and organizational nature—specifically, entrepreneurial startups versus mature enterprises—remains unexplored. Using an online experiment, this study examines whether consumers' privacy concerns differ between these two types of organizations. Drawing on protection motivation theory, the study investigates whether customers' privacy concerns are stronger toward entrepreneurial startups than toward mature firms when both declare privacy protection. It further explores whether consumer participation in designing privacy protection mechanisms differently affects consumers' privacy concerns toward start‐ups versus mature firms. The empirical results of an online experiment using a sample of 373 college students support the study hypotheses that (i) for unilateral privacy protection declarations, consumers' privacy concerns are higher toward entrepreneurial startups, and (ii) when consumers are invited to participate in designing privacy protection mechanisms, consumers' privacy concerns toward entrepreneurial startups significantly decrease. Our findings complement the literature on consumer privacy defensive behaviors by highlighting that consumer privacy concerns are associated with the organizational nature and privacy protection initiatives.