Rethinking some of the rethinking of partial least squares
ISSN: 0309-0566
Article publication date: 27 March 2019
Issue publication date: 30 April 2019
Abstract
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 Finally, this paper opposes characterizing common concepts and practices of PLS-SEM as “out-of-date” without providing well-substantiated alternatives and solutions.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.
Keywords
Acknowledgements
Even though this research does not use the statistical software SmartPLS (www.smartpls.com), Ringle acknowledges a financial interest in SmartPLS.
Citation
Hair, J.F., Sarstedt, M. and Ringle, C.M. (2019), "Rethinking some of the rethinking of partial least squares", European Journal of Marketing, Vol. 53 No. 4, pp. 566-584. https://doi.org/10.1108/EJM-10-2018-0665
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited