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How to specify, estimate, and validate higher-order constructs in PLS-SEM

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  • Sarstedt, Marko
  • Hair, Joseph F.
  • Cheah, Jun-Hwa
  • Becker, Jan-Michael
  • Ringle, Christian M.

Abstract

Higher-order constructs, which facilitate modeling a construct on a more abstract higher-level dimension and its more concrete lower-order subdimensions, have become an increasingly visible trend in applications of partial least squares structural equation modeling (PLS-SEM). Unfortunately, researchers frequently confuse the specification, estimation, and validation of higher-order constructs, for example, when it comes to assessing their reliability and validity. Addressing this concern, this paper explains how to evaluate the results of higher-order constructs in PLS-SEM using the repeated indicators and the two-stage approaches, which feature prominently in applied social sciences research. Focusing on the reflective-reflective and reflective-formative types of higher-order constructs, we use the well-known corporate reputation model example to illustrate their specification, estimation, and validation. Thereby, we provide the guidance that scholars, marketing researchers, and practitioners need when using higher-order constructs in their studies.

Suggested Citation

  • Sarstedt, Marko & Hair, Joseph F. & Cheah, Jun-Hwa & Becker, Jan-Michael & Ringle, Christian M., 2019. "How to specify, estimate, and validate higher-order constructs in PLS-SEM," Australasian marketing journal, Elsevier, vol. 27(3), pages 197-211.
    • Handle: RePEc:eee:aumajo:v:27:y:2019:i:3:p:197-211
    DOI: 10.1016/j.ausmj.2019.05.003
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    References listed on IDEAS

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