Virtual Influencers as Relational Capital: Credibility, Engagement, Psychological Ownership and Brand Loyalty in E-Retailing

Abstract

The rapid advancement of artificial intelligence and digital technologies has accelerated the adoption of virtual influencers. As developing economies experience growing internet penetration and emergence of tech-savvy consumers, virtual influencers are now becoming influential tools in the marketing ecosystems. Virtual Influencers are computer generated, AI driven personas or avatars that interact with consumers across social media and different digital platforms (Byun & Ahn, 2023). They not only reshape perceptions of consumers but generate authenticity, trust, and brand interaction. While virtual influencers have gained high commercial adoption the psychological pathways through which credibility contributes to long term brand loyalty remain underexplored in existing literature. Although previous research has explored relationships among variables credibility, engagement, and purchase intention a less has been explored on explaining the full psychological pathway from influencer perception to sustained loyalty. This study draws upon source credibility theory, Source Credibility theory, Psychological Ownership theory, and Customer Engagement theory. The current study aims to empirically examine a serial mediation mechanism through which customer engagement and psychological ownership between virtual influencer credibility dimensions trust, expertise, and attractiveness influences brand loyalty within the e-retailing context of a developing economy. Through this perspective this research responds to the theme of Innovation Capital in the AI Era and advances understanding of organisational intellectual capital in digital environments. The study proposes 12 hypotheses. With respect to direct effects H1, H2, H3 posits that trust, expertise and attractiveness of virtual influencers has a significant positive impact on customer engagement. H4 posits that customer engagement has a significant positive impact on psychological ownership. H5 posits that psychological ownership has a significant positive impact on brand loyalty. Regarding simple mediation effects H6 proposes that customer engagement significantly mediates the relationship between trust and brand loyalty. H7 proposes that customer engagement significantly mediates the relationship between expertise and brand loyalty. H8 proposes that customer engagement significantly mediates the relationship between attractiveness and brand loyalty, and H9 proposes that psychological ownership significantly mediates the relationship between customer engagement and brand loyalty. In terms of serial mediation effects, that represent the central theoretical contribution of this study, H10 hypothesizes that trust indirectly influences brand loyalty through the serial mediation of customer engagement and psychological ownership. H11 hypothesizes that expertise indirectly influences brand loyalty through the serial mediation of customer engagement and psychological ownership. H12 hypothesizes that attractiveness indirectly influences brand loyalty through the serial mediation of customer engagement and psychological ownership...