Structural equation modeling (SEM) is a widely applied and useful tool for project management scholars. In this Thoughtlet article, we critically reflect on the measurement philosophy underlying the ...two streams of SEM and their adequacy for estimating relationships among concepts commonly encountered in the field (e.g., team performance). We also discuss considerations to ponder when making the choice between the two types of SEM as well as between SEM and regression analysis.
Discriminant validity assessment has become a generally accepted prerequisite for analyzing relationships between latent variables. For variance-based structural equation modeling, such as partial ...least squares, the Fornell-Larcker criterion and the examination of cross-loadings are the dominant approaches for evaluating discriminant validity. By means of a simulation study, we show that these approaches do not reliably detect the lack of discriminant validity in common research situations. We therefore propose an alternative approach, based on the multitrait-multimethod matrix, to assess discriminant validity: the heterotrait-monotrait ratio of correlations. We demonstrate its superior performance by means of a Monte Carlo simulation study, in which we compare the new approach to the Fornell-Larcker criterion and the assessment of (partial) cross-loadings. Finally, we provide guidelines on how to handle discriminant validity issues in variance-based structural equation modeling.
Purpose
Partial least squares structural equation modeling (PLS-SEM) is an important statistical technique in the toolbox of methods that researchers in marketing and other social sciences ...disciplines frequently use in their empirical analyses. The purpose of this paper is to shed light on several misconceptions that have emerged as a result of the proposed “new guidelines” for PLS-SEM. The authors discuss various aspects related to current debates on when or when not to use PLS-SEM, and which model evaluation metrics to apply. In addition, this paper summarizes several important methodological extensions of PLS-SEM researchers can use to improve the quality of their analyses, results and findings.
Design/methodology/approach
The paper merges literature from various disciplines, including marketing, strategic management, information systems, accounting and statistics, to present a state-of-the-art review of PLS-SEM. Based on these findings, the paper offers a point of orientation on how to consider and apply these latest developments when executing or assessing PLS-SEM-based research.
Findings
This paper offers guidance regarding situations that favor the use of PLS-SEM and discusses the need to consider certain model evaluation metrics. It also summarizes how to deal with endogeneity in PLS-SEM, and critically comments on the recent proposal to adjust PLS-SEM estimates to mimic common factor models that are the foundation of covariance-based SEM. Finally, this paper opposes characterizing common concepts and practices of PLS-SEM as “out-of-date” without providing well-substantiated alternatives and solutions.
Research limitations/implications
The paper paves the way for future discussions and suggests a way forward to reach consensus regarding situations that favor PLS-SEM use and its application.
Practical implications
This paper offers guidance on how to consider the latest methodological developments when executing or assessing PLS-SEM-based research.
Originality/value
This paper complements recently proposed “new guidelines” with the aim of offering a counter perspective on some strong claims made in the latest literature on PLS-SEM. It also clarifies some misconceptions regarding the application of PLS-SEM.
Most project management research focuses almost exclusively on explanatory analyses. Evaluation of the explanatory power of statistical models is generally based on F-type statistics and the R
2 ...metric, followed by an assessment of the model parameters (e.g., beta coefficients) in terms of their significance, size, and direction. However, these measures are not indicative of a model’s predictive power, which is central for deriving managerial recommendations. We recommend that project management researchers routinely use additional metrics, such as the mean absolute error or the root mean square error, to accurately quantify their statistical models’ predictive power.
Purpose
– Research on international marketing usually involves comparing different groups of respondents. When using structural equation modeling (SEM), group comparisons can be misleading unless ...researchers establish the invariance of their measures. While methods have been proposed to analyze measurement invariance in common factor models, research lacks an approach in respect of composite models. The purpose of this paper is to present a novel three-step procedure to analyze the measurement invariance of composite models (MICOM) when using variance-based SEM, such as partial least squares (PLS) path modeling.
Design/methodology/approach
– A simulation study allows us to assess the suitability of the MICOM procedure to analyze the measurement invariance in PLS applications.
Findings
– The MICOM procedure appropriately identifies no, partial, and full measurement invariance.
Research limitations/implications
– The statistical power of the proposed tests requires further research, and researchers using the MICOM procedure should take potential type-II errors into account.
Originality/value
– The research presents a novel procedure to assess the measurement invariance in the context of composite models. Researchers in international marketing and other disciplines need to conduct this kind of assessment before undertaking multigroup analyses. They can use MICOM procedure as a standard means to assess the measurement invariance.
Generalized structured component analysis (GSCA) is a technically well-established approach to component-based structural equation modeling that allows for specifying and examining the relationships ...between observed variables and components thereof. GSCA provides overall fit indexes for model evaluation, including the goodness-of-fit index (GFI) and the standardized root mean square residual (SRMR). While these indexes have a solid standing in factor-based structural equation modeling, nothing is known about their performance in GSCA. Addressing this limitation, we present a simulation study’s results, which confirm that both GFI and SRMR indexes distinguish effectively between correct and misspecified models. Based on our findings, we propose rules-of-thumb cutoff criteria for each index in different sample sizes, which researchers could use to assess model fit in practice.
Purpose
The purpose of this paper is to provide a comprehensive, yet concise, overview of the considerations and metrics required for partial least squares structural equation modeling (PLS-SEM) ...analysis and result reporting. Preliminary considerations are summarized first, including reasons for choosing PLS-SEM, recommended sample size in selected contexts, distributional assumptions, use of secondary data, statistical power and the need for goodness-of-fit testing. Next, the metrics as well as the rules of thumb that should be applied to assess the PLS-SEM results are covered. Besides presenting established PLS-SEM evaluation criteria, the overview includes the following new guidelines: PLSpredict (i.e., a novel approach for assessing a model’s out-of-sample prediction), metrics for model comparisons, and several complementary methods for checking the results’ robustness.
Design/methodology/approach
This paper provides an overview of previously and recently proposed metrics as well as rules of thumb for evaluating the research results based on the application of PLS-SEM.
Findings
Most of the previously applied metrics for evaluating PLS-SEM results are still relevant. Nevertheless, scholars need to be knowledgeable about recently proposed metrics (e.g. model comparison criteria) and methods (e.g. endogeneity assessment, latent class analysis and PLSpredict), and when and how to apply them to extend their analyses.
Research limitations/implications
Methodological developments associated with PLS-SEM are rapidly emerging. The metrics reported in this paper are useful for current applications, but must always be up to date with the latest developments in the PLS-SEM method.
Originality/value
In light of more recent research and methodological developments in the PLS-SEM domain, guidelines for the method’s use need to be continuously extended and updated. This paper is the most current and comprehensive summary of the PLS-SEM method and the metrics applied to assess its solutions.
Structural model robustness checks in PLS-SEM Sarstedt, Marko; Ringle, Christian M; Cheah, Jun-Hwa ...
Tourism economics : the business and finance of tourism and recreation,
06/2020, Volume:
26, Issue:
4
Journal Article
Peer reviewed
Partial least squares structural equation modeling (PLS-SEM) has become a standard tool for analyzing complex inter-relationships between observed and latent variables in tourism and numerous other ...fields of scientific inquiry. Along with the recent surge in the method’s use, research has contributed several complementary methods for assessing the robustness of PLS-SEM results. Although these improvements are documented in extant literature, research on tourism has been slow to adopt the relevant complementary methods. This article illustrates the use of recent advances in PLS-SEM, designed to ensure structural model results’ robustness in terms of nonlinear effects, endogeneity, and unobserved heterogeneity in a PLS-SEM framework. Our overarching aim is to encourage the routine use of these complementary methods to increase methodological rigor in the field.
Purpose
Structural equation modeling (SEM) depicts one of the most salient research methods across a variety of disciplines, including hospitality management. Although for many researchers, SEM is ...equivalent to carrying out covariance-based SEM, recent research advocates the use of partial least squares structural equation modeling (PLS-SEM) as an attractive alternative. The purpose of this paper is to systematically examine how PLS-SEM has been applied in major hospitality research journals with the aim of providing important guidance and, if necessary, opportunities for realignment in future applications. Because PLS-SEM in hospitality research is still in an early stage of development, critically examining its use holds considerable promise to counteract misapplications which otherwise might reinforce over time.
Design/methodology/approach
All PLS-SEM studies published in the six SSCI-indexed hospitality management journals between 2001 and 2015 were reviewed. Tying in with the prior studies in the field, the review covers reasons for using PLS-SEM, data characteristics, model characteristics, the evaluation of the measurement models, the evaluation of the structural model, reporting and use of advanced analyses.
Findings
Compared to other fields, the results show that several reporting practices are clearly above standard but still leave room for improvement, particularly regarding the consideration of state-of-the art metrics for measurement and structural model assessment. Furthermore, hospitality researchers seem to be unaware of the recent extensions of the PLS-SEM method, which clearly extend the scope of the analyses and help gaining more insights from the model and the data. As a result of this PLS-SEM application review in studies, this research presents guidelines on how to accurately use the method. These guidelines are important for the hospitality management and other disciplines to disseminate and ensure the rigor of PLS-SEM analyses and reporting practices.
Research limitations/implications
Only articles published in the SSCI-indexed hospitality journals were examined and any journals indexed in other databases were not included. That is, while this research focused on the top-tier hospitality management journals, future research may widen the scope by considering hospitality management-related studies from other disciplines, such as tourism research or general management.
Originality/value
This study contributes to the literature by providing hospitality researchers with the updated guidelines for PLS-SEM use. Based on a systematic review of current practices in the hospitality literature, critical methodological issues when choosing and using the PLS-SEM were identified. The guidelines allow to improve future PLS-SEM studies and offer recommendations for using recent advances of the method.
PDF
