The Use And Misuse Of Structural Equation Modeling In Management Research
AbstractThe research practice in management research is dominantly based on structural equation modeling, but almost exclusively, and often misguidedly, on covariance-based SEM. We adumbrate theoretical foundations and guidance for the two SEM streams: covariance-based, also known as LISREL, covariance structure analysis, latent variable analysis, etc.; and variance-based SEM, also known as a component-based SEM, PLS, etc. Our conceptual framework discusses the two streams by analysis of theory, measurement model specification, sample and goodness-of-fit. We question the usefulness of Cronbach’s alpha research paradigm and discuss alternatives that are well-established in social science, but not well-known in the management research community. We conclude with discussion of some open questions in management research practice that remain under-investigated and unutilized.
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Bibliographic InfoPaper provided by ISCTE-IUL, Business Research Unit (BRU-IUL) in its series Working Papers Series 2 with number 13-07.
Date of creation: 13 Sep 2013
Date of revision:
Structural equation modeling; covariance- and variance-based SEM; formative and reflective indicators; LISREL; PLS;
Find related papers by JEL classification:
- C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- M0 - Business Administration and Business Economics; Marketing; Accounting - - General
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- Diamantopoulos, Adamantios & Riefler, Petra & Roth, Katharina P., 2008. "Advancing formative measurement models," Journal of Business Research, Elsevier, vol. 61(12), pages 1203-1218, December.
- Heungsun Hwang & Moon-Ho Ho & Jonathan Lee, 2010. "Generalized Structured Component Analysis with Latent Interactions," Psychometrika, Springer, vol. 75(2), pages 228-242, June.
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