The impact of legitimacy types on customer loyalty and the moderating role of the perceived COVID-19 threat: cross-country comparison between Japan and Croatia

Abstract

ABSTRACT By applying institutional theory in retail and COVID-19 settings, this paper investigates the impact of legitimacy dimensions on customer loyalty, considering the moderating effect of the perceived COVID-19 threat. The data collected by a consumer survey in Japan and Croatia were analysed using Structural Equation Modelling. The results from both samples reveal that moral and cognitive legitimacy are critical loyalty drivers. The perceived COVID-19 threat moderated the relationship between cognitive legitimacy and loyalty. The study also reveals some differences between the countries. The impact of pragmatic legitimacy is significant only in Croatia, while perceived threat negatively moderates the relationship between moral legitimacy and loyalty only in Japan. The study provides recommendations for managers on how to gain loyalty through actions supporting legitimacy.