Foreign Firms’ Cross-cultural Competence and Pro-domestic Purchasing Behaviours: How Relevant Are Social Norms?

Abstract

This study examined the role of the perceived cross-cultural competence of foreign firms on local consumers’ ethnocentrism and pro-domestic purchasing behaviours, as measured by pro-domestic purchasing bias and sacrifices in favour of pro-domestic purchasing among consumers. The study also investigated the role of social norms in reinforcing consumer ethnocentrism and fostering pro-domestic buying behaviours. A quantitative methodology, in the form of a survey strategy, was employed to obtain data from South African consumers. Partial least squares structural equation modelling was used to validate the scales and to test the path model. The findings of the study show that perceived cross-cultural competence is negatively related to consumer ethnocentrism, and they indicate that consumers’ ethnocentrism significantly predicts their degree of pro-domestic purchasing bias and the sacrifices they make in favour of pro-domestic purchasing. Finally, the findings show that the relationships between consumer ethnocentrism and pro-domestic purchasing bias, on the one hand, and consumer ethnocentrism and sacrifice for pro-domestic purchasing, on the other, are significantly moderated by social norms. The findings of this study differ from those in the literature by shedding light on the importance of foreign firms’ perceived cross-cultural competence in ameliorating consumer ethnocentrism and pro-domestic purchasing behaviour. The study contributes to the literature by showing how social norms are a boundary condition that reinforces consumer ethnocentrism with respect to pro-domestic purchasing behaviours in South Africa.