An empirical study on psychological contract mechanism of customer loyalty

Applying the psychological contract theory to the marketing context, this paper points out that the psychological contract is a significant mediator between customer satisfaction and customer loyalty. In this paper, the psychological contract mechanism behind customer loyalty is analyzed from both transactional and relational psychological contract and a research framework is put forward. Based upon the structural equation, modeling PLS-Graph package, the relative theoretical hypotheses are empirically tested by the survey data analysis. Empirical results show that all paths among the dimensions of loyalty and psychological contract are significant and substantiate the important influences of psychological contract upon customer loyalty. Finally, management implications are discussed.