The emergence of Location-Based Mobile Advertising (LBA) on mobile phones is a recent phenomenon that has profoundly changed consumers’ shopping behavior. In this context, little is known about the influence of LBA on the purchasing intention of users. Based on the Theory of Reasoned Action (TRA) and the Privacy Calculus Theory (PCT), this study develops an impact model and empirically tests it using structural equation modeling (SEM) with data from 294 users in Germany of the PAYBACK mobile app. It was found that purchase intentions are influenced by the constructs “User Attitude towards LBA” and “Disclosure of Personal Information.” “User Attitude towards LBA” is dependent on how users perceive the various app functionalities. These effects are significantly enhanced by the app's “Location Context Quality.” The construct “Intention to disclose personal information” depends on the constructs “Perceived benefit” and “Perceived risks of disclosure of personal information,” while “Perceived benefit” is also enhanced by the “Location Context Quality” of the app.
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