Entrepreneurs are an essential component of a prosperous society, transforming potential into productivity not only for themselves and their business partners but also for the entire economy in which they operate (Xi, 2007). As a result, their personalities and behaviors are a source of both public fascination and concern. As consumers take great interest in corporate responses to sustainability and philanthropy, entrepreneurs can be a major driver of word of mouth (WOM; Yin et al., 2019). Entrepreneur-related word of mouth (hereafter, ER-WOM) refers to the communication of entrepreneurial behavior between consumers (Yuan & Huang, 2014). Previous studies have found that ER-WOM has a significant impact on entrepreneur image (Yuan et al., 2017), brand evaluation (Yuan & Peluso, 2020; Yuan & Zheng, 2019), and even corporate image (Yuan & Peluso, 2019). However, the mechanisms that drive this particular type of WOM remain poorly understood.

 

Since WOM is a social act that depends on the actor as well as the audience and how they process information, it is important to include a consumer characteristic that reflects sociocultural values when studying its mechanisms and influence. Karmic beliefs emphasize the inevitable correlation between a type of behavior and its outcome (Bernard, 1981; King, 1999); thus, we proposed that consumers with strong (vs. weak) karmic beliefs would tend to spread ER-WOM in response to warmth (vs. competence) behavior. In addition to the above factors, we considered the notion—derived from dual-system theory—that different types of information trigger different processing systems (Epstein, 1991, 1994). Emotionally oriented information activates the “hot” system for emotional processing, while functionally oriented information activates the “cold” system for rational processing (Metcalfe & Mischel, 1999). Therefore, this study proposed that different types of entrepreneurial behavior would activate different information processing modes in consumers with different karmic beliefs, the interaction of which would affect consumers’ willingness to spread ER-WOM. To analyze this interaction, we utilized the stereotype content model (Fiske et al., 2002, 2007), which is a widely validated framework for classifying human conduct, to divide entrepreneur behavior into two types: warmth and competence.

The stereotype content model is a powerful theoretical tool for analyzing behavior (Aaker et al., 2010; Z. Zhu et al., 2020). Its two dimensions, warmth and competence, summarize the main characteristics of people and groups. The warmth dimension captures traits related to perceived intentions, including friendliness, honesty, ethics, trustworthiness, and helpfulness, while the competence dimension reflects traits related to perceived capability, including intelligence, skill, effectiveness, and creativity (Fiske et al., 2002, 2007). Drawing on the stereotype content model, an entrepreneur’s warmth behavior is associated with charity, environmental protection, and the positive treatment of family members and employees, which reflect the entrepreneur’s love, kindness, and sense of social responsibility, while their competence behavior is associated with innovation, corporate leadership, and strategic decision making, which reflect the entrepreneur’s ambition, talent, and capability. When entrepreneurs are publicly visible, their warmth or competence behaviors are likely to generate conversation among consumers and encourage WOM. Through the lens of the stereotype content model, we postulated that an entrepreneur’s warmth behavior would reflect their commitment and social responsibility and thus their altruism, whereas an entrepreneur’s competence behavior would reflect how they manage the business and thus their self-interest.

 

Karma generally describes being rewarded for good deeds and punished for bad deeds (Ong et al., 2022; Wei, 2013). In Eastern religions such as Taoism, Buddhism, and Hinduism (Valenzuela et al., 2018; White et al., 2021), karma is treated as a central principle and a universal force that acts on human beings (Exline et al., 2021). The doctrine of karma has three basic laws: first, the concept of rebirth, where actions in a given life may produce results in the present or the afterlife; second, the broad classification of actions as appropriate (good) and inappropriate (bad); and third, the belief that appropriate (vs. inappropriate) actions will produce good (vs. bad) consequences in the future (Krishan, 1997). Adhering to this doctrine and living in accordance with its laws constitutes karmic beliefs.

 

Several charity marketing research studies have empirically examined how karmic beliefs influence consumer behaviors (Chen et al., 2022). For example, Kopalle et al. (2010) found that karmic beliefs were associated with a long-term orientation that diminished uncertainty and influenced performance expectations. Converse et al. (2012) further suggested that people with strong karmic beliefs, when faced with outcomes beyond their control, made karmic investments by engaging in prosocial behavior and thereby mitigated those outcomes. However, Kulow and Kramer (2016) found that consumers with strong karmic beliefs were less willing to donate when their prosocial behavior was motivated by being oriented internally toward the self rather than externally toward others, as the former does not produce karmic rewards. Furthermore, karmic beliefs may have important interpersonal implications (Ong et al., 2022). For example, in terms of WOM communication, Valenzuela et al. (2018) found that consumers talk more about others’ positive behaviors when they believe in karma. However, their study did not further explore whether differences in karmic beliefs affect the types of positive behaviors that consumers share about others via WOM. Drawing on the philosophy of karma, we conjectured that people with strong (vs. weak) karmic beliefs would have a better perception of altruistic (vs. self-interested) actions. Therefore, we proposed the following hypotheses:

Hypothesis 1a: Consumers with stronger karmic beliefs will exhibit a higher propensity to share entrepreneur-related word of mouth about an entrepreneur who demonstrates warmth behavior.

Hypothesis 1b: Consumers with weaker karmic beliefs will exhibit a higher propensity to share entrepreneur-related word of mouth about an entrepreneur who demonstrates competence behavior.

People’s perception of entrepreneurial behavior is influenced by more than just karmic beliefs. For example, their belief system may be mediated by how they process information in a given moment. In the last few decades, the concept of the dual-system processing mode has found wide acceptance among researchers (Epstein, 1991, 1994; Metcalfe & Mischel, 1999). According to this concept, people initiate different processing modes in response to different types of information (Cian et al., 2015; Huang et al., 2014), processing rational information cognitively and emotional information affectively (Rosselli et al., 1995; Zhao et al., 2011). Numerous studies have shown that rational (cold) and emotional (hot) processing modes play different roles in consumers’ attitude toward advertising and brands (Batra & Ray, 1986; Burke & Edell, 1989; Kim et al., 2012), product evaluation (Zhao et al., 2011), and purchase decisions (May, 2017; Shiv & Nowlis, 2004). Because entrepreneurs act as advocates for their firms (Pincus et al., 1991), their behaviors will similarly activate these processing modes. Therefore, we conjectured that consumers’ different karmic beliefs would influence whether they process entrepreneurs’ behavioral information cognitively or affectively. We expected that an entrepreneur’s warmth behavior would most appeal to people with strong karmic beliefs due to triggering the “hot” processing systems, whereas their competence behavior would most appeal to those with weak karmic beliefs due to triggering the “cold” processing systems. Therefore, we proposed the following hypotheses:

Hypothesis 2a: Consumers with stronger karmic beliefs will experience affective processing in response to an entrepreneur’s warmth behavior and thus exhibit a stronger intention to spread entrepreneur-related word of mouth.

Hypothesis 2b: Consumers with weaker karmic beliefs will experience cognitive processing in response to an entrepreneur’s competence behavior and thus exhibit a stronger intention to spread entrepreneur-related word of mouth.

 

Figure 1 shows our conceptual framework.

 

In Study 1 we examined how karmic beliefs interact with different types of entrepreneurial behavior to influence consumers’ willingness to share ER-WOM, utilizing two experimental scenarios: one for warmth and one for competence.

To identify the best test conditions, we created two pieces of news about a virtual entrepreneur, Si Li. One focused on his environmental protection, representing warmth, and the other highlighted his innovative behaviors, representing competence. We used the following news piece to showcase his warmth: “Si Li is the chairman of a company and also one of the founders and vice-presidents of the Alaska SEE Ecological Association. Ten years ago he started to devote himself to preventing the desertification of Ningxia and Inner Mongolia, spending hundreds of millions of dollars to establish the Alashan Ecological Tourism Area—now a major benchmark for ecological and environmental engineering. Since then, he has stopped all commercial investments to focus on the promotion of ecological conservation projects.” To showcase his competency, we used the following text: “In the Hurun Research Institute’s list of the top 100 Chinese brands, Si Li, chairman of a company, is the only entrepreneur who has created three brands that are on the list at the same time. The three brands created by Si Li represent a new business model and a business miracle in China, and while major scientific discoveries are forthcoming, he is already considered a worthy leader of innovative entrepreneurs in China today.”

 

We sent out a notice of the pretest through WeChat groups to students majoring in business management at Zhejiang Normal University. Participants comprised 56 university students (42.8% women and 47.2% men; M_age = 31.4 years, SD = 2.6, range = 18–60), who we randomly assigned to a between-subjects experimental design in which they were asked to make judgments about the entrepreneurial behavior described in the cue text. After reading the scenarios, we asked the students in the warmth group to rate the extent to which the behaviors reflected warmth/friendliness/generosity and those in the competence group to rate the extent to which the behaviors reflected advantageous/efficient/effective behavior. We administered the pretest on March 26, 2023, allowing participants 3–5 minutes to complete the survey. Items were rated on a 7-point Likert scale ranging from 1 = not at all to 7 = very much. To ensure validity, we used the measures of Aaker et al. (2010) and Judd et al. (2005), which we translated into Chinese and then back into English for use in this study. An analysis of variance (ANOVA) showed significant differences in both the entrepreneur’s environmental protection behavior group, M_warmth = 5.96, SD = 0.12; M_competence = 3.58, SD = 0.23; F(1, 54) = 62.18, p < .001, and the entrepreneur’s innovative behavior group, M_warmth = 3.26, SD = 0.09; M_competence = 5.87, SD = 0.17; F(1, 54) = 76.32, p < .001. These results indicate that the test successfully manipulated the types of entrepreneurial behavior.

 

For Survey 1 we recruited 318 consumers (52.9% women, 47.1% men; M_age = 38.2 years, SD = 2.4, range = 18–60) from China through the Marketing Research Office WeChat public platform, excluding six participants who failed the attention check. After informing the participants of our research focus on entrepreneurs’ behaviors, we obtained their informed consent and randomly assigned them to two experimental groups related to warmth and competence. Each scenario asked participants to imagine that they had a habit of reading news on mainstream media websites and had recently encountered an article about Si Li, the chairman of Company A. After reading the respective news piece taken from the pretest, participants completed measures assessing their karmic beliefs and willingness to share ER-WOM, underwent a manipulation check about the types of entrepreneurial behavior, and provided demographic information. We placed the attention check question in different parts of the survey based on the scenario (at the end of the first task for the warmth scenario and at the beginning of the third task for the competency scenario). We administered the survey on April 12, 2023, allowing participants 3–5 minutes to answer the items. After completing the survey, participants were compensated with RMB 2.

 

 

To ensure validity, we translated the items from all scales into Chinese and then back into English for use in this study.

 

To measure karmic beliefs we used the five-item scale of Kopalle et al. (2010): “I believe in karma,” “I believe in rebirth,” “The universe is a continuous cycle,” “There is no beginning or end to the universe,” and “The world was not formed by a one-time act of creation.” Items are rated on a 7-point Likert scale ranging from 1 = not at all to 7 = very much. Cronbach’s alpha was .77 in this study (M = 5.54, SD = 1.69).

 

We measured consumers’ willingness to share ER-WOM using three items adapted from Wien and Olsen (2012): “I will spread information about this entrepreneur’s actions,” “I am willing to spread information about this entrepreneur’s actions,” and “It’s my pleasure to spread information about this entrepreneur’s actions.” Items are rated on a 7-point Likert scale ranging from 1 = not at all to 7 = very much. Cronbach’s alpha in this study was .92 (M = 5.73, SD = 1.12).

 

We used Models 1, 4, and 7 of the PROCESS 4.1 macro for SPSS 25.0 to analyze the data.

We conducted an ANOVA of the entrepreneurial behavior types, which indicated a successful manipulation: in the warmth scenario, M_warmth = 5.93, SD = 0.08; M_competence = 4.68, SD = 0.17; F(1, 310) = 51.10, p < .001; in the competence scenario, M_warmth = 4.34, SD = 0.13; M_competence = 5.91, SD = 0.09; F(1, 310) = 93.52, p < .001.

 

We tested the interaction effect of karmic beliefs with entrepreneurial behavior types using the PROCESS macro for SPSS 25.0 and tested for moderating effects using Model 1 in the PROCESS 4.1 program (Hayes, 2017). Warmth and competence behavior served as the independent variables, willingness to share ER-WOM was the dependent variable, and karmic beliefs acted as the moderating variable. The results revealed a significant effect of type of entrepreneur behavior, b = –0.58, SE = 0.17, t(312) = –3.46, p = .006, 95% confidence interval (CI) [–0.91, –0.25], and a significant effect of karmic beliefs, b = 3.40, SE = 0.26, t(312) = 13.26, p < .001, 95% CI [2.90, 3.91]. There was a significant interaction between type of entrepreneur behavior and karmic beliefs, b = –2.29, SE = 0.17, t(312) = –13.57, p < .001, 95% CI [–2.62, –1.96] (see Figure 2).

 

A Johnson–Neyman floodlight analysis (Spiller et al., 2013) revealed that at higher degrees of karmic beliefs, participants had higher ER–WOM intentions in the entrepreneur warmth behavior condition than in the competence behavior condition, Johnson–Neyman value ≥ 5.44; b = –0.33, SE = 0.17, t(312) = –1.97, p = .05. In contrast, at lower degrees of karmic beliefs, participants had higher ER-WOM intentions in the entrepreneur competence behavior condition than in the warmth behavior condition, Johnson–Neyman value ≤ 5.14; b = 0.36, SE = 0.18, t(312) = 1.97, p = .05. Thus, Hypotheses 1a and 1b were supported.

 

In Study 2 we further tested the interaction effect while evaluating the mediating role of information processing mode by introducing new experimental scenarios to represent warmth and competence.

We recruited 305 Chinese internet users from the WJX website (52.1% women and 47.9% men; M_age = 28.6 years, SD = 3.8, range = 18–60), excluding 15 participants who failed the attention check. Similar to Study 1, we informed the participants of the research focus, obtained their informed consent, and then randomly assigned them to the two experimental conditions. In both scenarios, we told participants to imagine that they habitually read news on authoritative media websites and one day encountered a piece of news about the chairman of a virtual Company A, San Zhang (name fictionalized). In the warmth condition, participants read the following piece of news about the entrepreneur’s philanthropic behavior: “Since the year he started his business, entrepreneur San Zhang has been doing charity work and has donated billions of yuan to date. San Zhang has also set up a charity foundation with a huge amount of money dedicated to charity. For example, the foundation has helped dozens of villages in Tibet, Qinghai, Gansu, Yunnan, and Guizhou in the ‘Ten Thousand Enterprises Helping Ten Thousand Villages’ initiative.” In the competence condition, participants read the following paragraph highlighting leadership: “Company A has become a banner of Chinese high technology and the founder, San Zhang, has become the person most admired by many entrepreneurs. Looking back at Company A’s decades of development under entrepreneur San Zhang, it is a history of struggle and entrepreneurship that deserves to be studied by all managers, entrepreneurs, and bosses.” After reading their scenario, participants indicated their intention to share the news and their perception of the entrepreneur’s behavior. Next, they completed the affective and cognitive processing measurements as well as the karmic beliefs scale from Study 1. We used the same manipulation test for entrepreneurial behavior type as in Study 1, and participants provided the same demographic information. We used all the same measurement scales for Study 2 as for Study 1 except for those related to the dual-system processing mode. For that purpose, we used the scales for affective and cognitive information processing modes from Kim et al. (2012) and McQuarrie and Mick (1999), respectively, which we translated into Chinese and then back into English for use in this study. The affective processing mode scale comprises three items: “This news caused me to feel many emotions (e.g., moved, happy),” “This news touched many emotions within me,” and “This news moved me emotionally.” Items are rated on a 7-point Likert scale ranging from 1 = not at all to 7 = very much. Cronbach’s alpha in this study was .93. The cognitive processing mode scale also comprises three items: “This news caused me to think a lot,” “This news triggered some thoughts in me,” and “This news caused me to have many insights.” Items are rated on a 7-point Likert scale ranging from 1 = not at all to 7 = very much. Cronbach’s alpha in this study was .94. We administered the survey on April 12, 2023, allowing participants 3–5 minutes to answer the questions. After completing the study, participants were compensated RMB 2.

 

We used Models 1, 4, and 7 of the PROCESS 4.1 macro for SPSS 25.0 to analyze the data.

We conducted an ANOVA of the entrepreneurial behavior types and found a successful manipulation: in the philanthropic behavior scenario, M_warmth = 6.14, SD = 0.06; M_competence = 4.23, SD = 0.24; F(1, 290) = 130.49, p < .001; in the leadership behavior scenario, M_warmth = 4.71, SD = 0.10; M_competence = 5.58, SD = 0.15; F(1, 290) = 15.16, p < .001.

 

The ANOVA results showed that there was a significant interaction effect between entrepreneurial behavior type and karmic beliefs on participants’ willingness to share ER-WOM, F(1, 286) = 103.52, p < .001. For participants with strong karmic beliefs, the entrepreneur’s philanthropic behavior induced a higher willingness to share ER-WOM than leadership behavior did, M_{strong-warmth} = 5.87, SD = 0.11; M_{strong-competence} = 3.41, SD = 0.16; F(1, 286) = 89.45, p < .001. However, for participants with weak karmic beliefs, the entrepreneur’s leadership behavior led to a stronger willingness to share ER-WOM than philanthropic behavior did, M_weak-warmth = 4.18, SD = 0.13; M_{weak-competence} = 6.03, SD = 0.10; F(1, 286) = 32.76, p < .001. Thus, Hypotheses 1a and 1b were further supported.

 

We conducted a mediated moderation analysis to examine the mediating effect of the dual-system processing mode using Model 7 of the PROCESS macro. The independent variable was the type of entrepreneurial behavior, the moderating variable was participants’ karmic beliefs, the mediating variables were affective and cognitive processing, and the dependent variable was the intention to share ER-WOM. The results showed a significant moderated mediation effect for both affective processing, β = .24, 95% CI [0.05, 0.41], and cognitive processing, β = .18, 95% CI [0.01, 0.29]. The indirect effect of affective processing was significant for participants with strong karmic beliefs, β = .15, 95% CI [0.04, 0.30], but not for those with weak karmic beliefs, β = –.08, 95% CI [–0.30, 0.12]. Meanwhile, the indirect effect of cognitive processing was significant for participants with weak karmic beliefs, β = .11, 95% CI [0.01, 0.20], but it was nonsignificant for those with strong karmic beliefs, β = .03, 95% CI [–0.04, 0.14]. Taken together, the results supported Hypotheses 2a and 2b (see Figure 3).

 

We conducted two studies to examine how different types of entrepreneurial behaviors—defined by the stereotype content model—influence the information processing modes of consumers with different karmic beliefs and their resulting willingness to share ER-WOM. There were two core findings. First, an entrepreneur’s warmth behaviors increased the likelihood that consumers with strong karmic beliefs would spread ER-WOM, while their competence behaviors increased the likelihood that consumers with weak karmic beliefs would spread ER-WOM. Second, the underlying mechanism appeared to be that an entrepreneur’s warmth behaviors activate the affective processing mode in consumers with strong karmic beliefs, while their competence behaviors activate the cognitive processing mode in consumers with weak karmic beliefs. Either pathway encouraged a higher willingness to spread ER-WOM.

This study makes three main theoretical contributions to the literature. First, we used the stereotype content model to align entrepreneurial behavior with two broad and widely accepted types of behavior: warmth and competence. Because entrepreneurial behavior can assume many forms, existing studies have classified it from a variety of perspectives (e.g., front and backstage; see L. Zhu et al., 2014); however, our application of both the dual-system processing mode and stereotype content model to entrepreneurs is novel, enriching the literature.

 

Second, we found that consumers’ karmic beliefs moderated the influence of entrepreneurial behaviors on consumers’ willingness to share ER-WOM. Karmic beliefs are a typical characteristic of consumers in Eastern cultures. Prior research has shown that in social life, people with strong karmic beliefs talk more about others’ positive behaviors (Valenzuela et al., 2018). However, little research has focused on how this tendency relates to specific groups (e.g., entrepreneurs) or whether it varies based on different karmic belief levels. We found that consumers with strong karmic beliefs were more likely to spread news about an entrepreneur’s warmth behaviors, while those with weak karmic beliefs were more likely to spread news about an entrepreneur’s competence behaviors, indicating that sociocultural values shape the dissemination of certain types of WOM.

 

Third, this study identified two parallel mediators, warmth and competence, which reveal how consumers with different karmic beliefs process information about different types of entrepreneurial behaviors. To our knowledge, no research to date has explored the mechanism that drives consumers’ dissemination of ER-WOM (e.g., how online comments about entrepreneurial behavior are formed). Our results highlight one relevant mediating pathway: warmth behaviors are more likely to activate consumers’ “hot” system for affective processing, while competence behaviors are more likely to activate consumers’ “cold” system for cognitive processing.

Our findings have important practical implications. First, we recommend that entrepreneurs who want to improve their public image behave warmly or competently regardless of whether they orient toward warmth or competency. For instance, entrepreneurs could enhance their reputation by using microblogs to emphasize topics such as making yourself a better person (for warmth) or managing your own business (for competency). In the era dominated by social media, we recommend that entrepreneurs utilize various communication channels to showcase these different behavior types, which could help them more effectively foster ER-WOM and thereby boost their corporate image.

 

Second, our results provide guidance for companies looking to tailor their marketing communications to particular audiences. Consumers’ karmic beliefs may be a relevant segmentation factor, considering they shape how people process messages about entrepreneurs’ behaviors. Consumers with strong karmic beliefs are more likely to be emotionally moved by an entrepreneur’s warmth behavior, while those with weak karmic beliefs are more likely to be rationally moved by an entrepreneur’s competence behavior; both pathways can encourage the spread of ER-WOM. Therefore, we recommend that companies trying to reach consumers with strong karmic beliefs show more of the entrepreneur’s charitable behavior, environmental protection, and other public welfare behaviors. To reach consumers with weak karmic beliefs, we recommend that companies present more of the entrepreneur’s leadership and business experience.

This study has several limitations. First, we focused only on the positive link between an entrepreneur’s behavior and ER-WOM. Future research could analyze the relative impact of an entrepreneur’s negative behavior. Second, we performed only a preliminary test of the dual-system processing mode and its mediating role. Future research could more deeply explore the kinds of affection or cognition generated by entrepreneurial behavior. Third, the sole moderating mechanism we considered was consumers’ karmic beliefs, but many individual factors are worthy of scholarly attention (e.g., consumers’ self-construal or power). Entrepreneurs’ idiosyncratic traits may play a moderating role as well. Last, we gathered participants from a single country, China, with a specific belief system, karma. Future researchers could apply our study design to other cultural contexts and spiritual orientations.

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