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Influence of customer perceived ethicality on customer loyalty in the banking industry of Pakistan

Shahina Batool (Department of Management Sciences, Balochistan University of Information Technology Engineering and Management Sciences, Quetta, Pakistan)
Babrak Ali Panezai (Department of Management Sciences, Balochistan University of Information Technology Engineering and Management Sciences, Quetta, Pakistan)
Ghulam Jan Baloch (Department of Management Sciences, University of Turbat, Turbat, Pakistan)
Shamaila Sohail (Department of Management Sciences, Balochistan University of Information Technology Engineering and Management Sciences, Quetta, Pakistan)

International Journal of Ethics and Systems

ISSN: 2514-9369

Article publication date: 6 April 2022

Issue publication date: 5 January 2023

602

Abstract

Purpose

The purpose of this paper is to determine empirically the effect of customer perceived ethicality (CPE) on customer loyalty (CL) and further the authors ascertained if customer trust (CT), customer affective commitment (CAC) and customer perceived quality (CPQ) acted as mediating mechanisms linking CPE and CL. This study also tested the influence of CL on customer word of mouth (CWOM).

Design/methodology/approach

In this study, data were collected from 390 customers of banks in Pakistan through a self-administered questionnaire and tested through partial least squares (PLS) with smart PLS 3.2.7 version.

Findings

Research findings provided evidence for the positive relationship between CPE and CL and mediating effects of CT, CAC and CPQ for the CPE–CL linkage. Furthermore, a positive and significant relationship between CL and CWOM was experienced.

Practical implications

This study can help banks to determine the importance of CT, CAC and CPQ, as they can facilitate translating CPE into CL. Furthermore, managers need to effectively communicate about their ethical activities and encourage their customers to share their experiences.

Originality/value

First, this paper has considered the effect of CPE on customer loyalty under research area of corporate service brands. Second, it examines the mediating role of three factors (CT, CAC and CPQ) between CPE and customer loyalty in the banking industry.

Keywords

Citation

Batool, S., Panezai, B.A., Baloch, G.J. and Sohail, S. (2023), "Influence of customer perceived ethicality on customer loyalty in the banking industry of Pakistan", International Journal of Ethics and Systems, Vol. 39 No. 1, pp. 54-80. https://doi.org/10.1108/IJOES-03-2021-0071

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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