Proceedings of Applied International Business Conference 2008 THE INTEGRATION OF THEORY OF PLANNED BEHAVIOR (TPB) AND TECHNOLOGY ACCEPTANCE MODEL IN INTERNET PURCHASING: A STRUCTURAL EQUATION MODELING (SEM) APPROACH Nik Kamariah Nik Mat ψ and Ilham Sentosa Universiti Utara Malaysia, Malaysia ______________________________________________________________________________________ Abstract Internet purchasing has been predicted to escalate with the increase of internet users around the globe. In line with the increase of users, it has been estimated that e-commerce spending would also amplify. In spite of the world internet potential, actual number of internet users who purchased online has declined. Thus, our study intends to investigate the drivers of internet purchasing based on the integration of theory of planned behavior (TPB) and technology acceptance model (TAM). By integrating TPB and TAM, this study examines the relationships between attitude, subjective norm, perceived behavior control, perceived usefulness and perceived ease of use toward intention and internet purchasing behavior. Data were collected from 304 university students via questionnaires. The analysis produced four structural models: hypothesized, re-specified, TPB competing and TAM competing models. It shows that hypothesized model created four significant direct impacts, re-specified model found three significant direct impacts, TPB competing model supported three direct impacts and TAM competing model supported four direct impacts. It seems that the direct impact of subjective norms on intention was consistently significant across three models namely, hypothesized, re-specified and TPB competing models. Conversely, the path from attitude to intention was consistently insignificant across the same three models. Other direct paths reveal inconsistent relationships between differing structural models. For mediating effects of intention on each hypothesized paths, we found two partial mediating effects of intention. The first effect was the partial mediating effects of intention on the relationship between attitude and behavior in TPB competing model. The second was the partial mediating effect of intention on the relationship between perceived usefulness and behavior in TAM. Mediating effects were not substantiated in hypothesized and revised model. Lastly, among the four structural models, revised model achieved the highest SMC (R 2 ), explaining 62.9% variance in internet purchasing behavior, followed by Theory of Planned Behavior (TPB) and Technology Acceptance model (TAM). According, hypothesized model obtained the lowest R 2 of 55% variance in internet purchasing behavior. The findings are discussed in the context of the internet purchasing behavior and intention in Malaysia. ______________________________________________________________________________________ Keywords: TPB; TAM; Internet purchasing behavior; Intention; Attitude; Subjective norms; Perceived behavior control. JEL Classification Codes: C42; C52; M15. 1. Introduction Internet purchasing has been predicted to escalate with the increase of internet users around the globe. For example internet users worldwide has escalated from 655 million in 2002 to 941 million users in 2005 (Dholakia and Uusitalo, 2002). In Asia Pacific, it is predicted that there could be 242 million internet users in 2005 (Taylor, 2002). In line with the increase of users, it has been estimated that e-commerce spending could increase from USD 118 billion worldwide in 2001 to USD707 billion in 2005 (Wolverton, 2001). In spite of the world internet potential, actual number of internet users who purchased online has declined. Reasons cited were reluctance to shop on-line, mistrust and security issues (Taylor, 2002). However, there is limited empirical investigation to verify the causal antecedents of internet purchase behavior in Malaysia. The commonly used theories to explain internet purchase behavior are the Theory of Planned Behavior ψ Corresponding author. Nik Kamariah Nik Mat. College of Business, Universiti Utara Malaysia, Malaysia, E-mail: drnik@uum.edu.my