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Applying Partial Least Squares in Tourism and Hospitality Research
Type: Book
ISBN: 978-1-78756-700-9

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Book part
Publication date: 14 December 2018

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Applying Partial Least Squares in Tourism and Hospitality Research
Type: Book
ISBN: 978-1-78756-700-9

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Article
Publication date: 27 March 2019

Joseph F. Hair, Marko Sarstedt and Christian M. Ringle

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…

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 Finally, this paper opposes characterizing common concepts and practices of PLS-SEM as “out-of-date” without providing well-substantiated alternatives and solutions.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.

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European Journal of Marketing, vol. 53 no. 4
Type: Research Article
ISSN: 0309-0566

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Book part
Publication date: 10 December 2015

Chun Kit Lok

Smart card-based E-payment systems are receiving increasing attention as the number of implementations is witnessed on the rise globally. Understanding of user adoption…

Abstract

Smart card-based E-payment systems are receiving increasing attention as the number of implementations is witnessed on the rise globally. Understanding of user adoption behavior of E-payment systems that employ smart card technology becomes a research area that is of particular value and interest to both IS researchers and professionals. However, research interest focuses mostly on why a smart card-based E-payment system results in a failure or how the system could have grown into a success. This signals the fact that researchers have not had much opportunity to critically review a smart card-based E-payment system that has gained wide support and overcome the hurdle of critical mass adoption. The Octopus in Hong Kong has provided a rare opportunity for investigating smart card-based E-payment system because of its unprecedented success. This research seeks to thoroughly analyze the Octopus from technology adoption behavior perspectives.

Cultural impacts on adoption behavior are one of the key areas that this research posits to investigate. Since the present research is conducted in Hong Kong where a majority of population is Chinese ethnicity and yet is westernized in a number of aspects, assuming that users in Hong Kong are characterized by eastern or western culture is less useful. Explicit cultural characteristics at individual level are tapped into here instead of applying generalization of cultural beliefs to users to more accurately reflect cultural bias. In this vein, the technology acceptance model (TAM) is adapted, extended, and tested for its applicability cross-culturally in Hong Kong on the Octopus. Four cultural dimensions developed by Hofstede are included in this study, namely uncertainty avoidance, masculinity, individualism, and Confucian Dynamism (long-term orientation), to explore their influence on usage behavior through the mediation of perceived usefulness.

TAM is also integrated with the innovation diffusion theory (IDT) to borrow two constructs in relation to innovative characteristics, namely relative advantage and compatibility, in order to enhance the explanatory power of the proposed research model. Besides, the normative accountability of the research model is strengthened by embracing two social influences, namely subjective norm and image. As the last antecedent to perceived usefulness, prior experience serves to bring in the time variation factor to allow level of prior experience to exert both direct and moderating effects on perceived usefulness.

The resulting research model is analyzed by partial least squares (PLS)-based Structural Equation Modeling (SEM) approach. The research findings reveal that all cultural dimensions demonstrate direct effect on perceived usefulness though the influence of uncertainty avoidance is found marginally significant. Other constructs on innovative characteristics and social influences are validated to be significant as hypothesized. Prior experience does indeed significantly moderate the two influences that perceived usefulness receives from relative advantage and compatibility, respectively. The research model has demonstrated convincing explanatory power and so may be employed for further studies in other contexts. In particular, cultural effects play a key role in contributing to the uniqueness of the model, enabling it to be an effective tool to help critically understand increasingly internationalized IS system development and implementation efforts. This research also suggests several practical implications in view of the findings that could better inform managerial decisions for designing, implementing, or promoting smart card-based E-payment system.

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E-services Adoption: Processes by Firms in Developing Nations
Type: Book
ISBN: 978-1-78560-709-7

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Book part
Publication date: 28 September 2015

Md Shah Azam

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to…

Abstract

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.

Details

E-Services Adoption: Processes by Firms in Developing Nations
Type: Book
ISBN: 978-1-78560-325-9

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Article
Publication date: 17 October 2016

Christian Nitzl, Jose L. Roldan and Gabriel Cepeda

Indirect or mediated effects constitute a type of relationship between constructs that often occurs in partial least squares (PLS) path modeling. Over the past few years…

Abstract

Purpose

Indirect or mediated effects constitute a type of relationship between constructs that often occurs in partial least squares (PLS) path modeling. Over the past few years, the methods for testing mediation have become more sophisticated. However, many researchers continue to use outdated methods to test mediating effects in PLS, which can lead to erroneous results. One reason for the use of outdated methods or even the lack of their use altogether is that no systematic tutorials on PLS exist that draw on the newest statistical findings. The paper aims to discuss these issues.

Design/methodology/approach

This study illustrates the state-of-the-art use of mediation analysis in the context of PLS-structural equation modeling (SEM).

Findings

This study facilitates the adoption of modern procedures in PLS-SEM by challenging the conventional approach to mediation analysis and providing more accurate alternatives. In addition, the authors propose a decision tree and classification of mediation effects.

Originality/value

The recommended approach offers a wide range of testing options (e.g. multiple mediators) that go beyond simple mediation analysis alternatives, helping researchers discuss their studies in a more accurate way.

Details

Industrial Management & Data Systems, vol. 116 no. 9
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 18 December 2018

Gabriel Cepeda-Carrion, Juan-Gabriel Cegarra-Navarro and Valentina Cillo

Structural equation modelling (SEM) has been defined as the combination of latent variables and structural relationships. The partial least squares SEM (PLS-SEM) is used…

Abstract

Purpose

Structural equation modelling (SEM) has been defined as the combination of latent variables and structural relationships. The partial least squares SEM (PLS-SEM) is used to estimate complex cause-effect relationship models with latent variables as the most salient research methods across a variety of disciplines, including knowledge management (KM). Following the path initiated by different domains in business research, this paper aims to examine how PLS-SEM has been applied in KM research, also providing some new guidelines how to improve PLS-SEM report analysis.

Design/methodology/approach

To ensure an objective way to analyse relevant works in the field of KM, this study conducted a systematic literature review of 63 publications in three SSCI-indexed and specific KM journals between 2015 and 2017.

Findings

Our results show that over the past three years, a significant amount of KM works has empirically used PLS-SEM. The findings also suggest that in light of recent developments of PLS-SEM reporting, some common misconceptions among KM researchers occurred mainly related to the reasons for using PLS-SEM, the purposes of PLS-SEM analysis, data characteristics, model characteristics and the evaluation of the structural models.

Originality/value

This study contributes to that vast KM literature by documenting the PLS-SEM-related problems and misconceptions. Therefore, it will shed light for better reports in PLS-SEM studies in the KM field.

Details

Journal of Knowledge Management, vol. 23 no. 1
Type: Research Article
ISSN: 1367-3270

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Book part
Publication date: 13 August 2012

Mehmet Mehmetoglu

Tourism research contains a large share of consumer behavior-orientated studies using multidimensional constructs (exogenous/endogenous). Accordingly, scholars have mainly…

Abstract

Tourism research contains a large share of consumer behavior-orientated studies using multidimensional constructs (exogenous/endogenous). Accordingly, scholars have mainly made use of a two-step approach that can be referred to as PCA-MLR (principal component analysis and then ordinary least squares multiple linear regression analysis) to examine the relationships among exogenous and endogenous constructs in a statistical model. Although this two-step approach has contributed to the advancement of tourism research, it still suffers from a number of drawbacks which can readily be overcome by a so-called second-generation statistical tool, namely, partial least squares approach to structural equation modeling (PLS-SEM). The current chapter explains and illustrates (with an application to tourism data) the advantages (e.g., several layers of estimations, suiting small sample sizes, robustness to multicollinearity, model-based clustering, etc.) of PLS-SEM both from a statistical and practical point of view. Finally, an elucidation is also provided for suggesting PLS-SEM as an alternative to PCA-MLR instead of COV-SEM (covariance-based structural equation modeling). The chapter concludes by proposing that PLS-SEM is a reliable and flexible statistical approach that is of high value, in particular, for applied research.

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Advances in Hospitality and Leisure
Type: Book
ISBN: 978-1-78052-936-3

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Article
Publication date: 9 October 2018

Ahmet Usakli and Kemal Gurkan Kucukergin

The purpose of this study is to review the use of partial least squares-structural equation modeling (PLS-SEM) in the field of hospitality and tourism and thereby to…

Abstract

Purpose

The purpose of this study is to review the use of partial least squares-structural equation modeling (PLS-SEM) in the field of hospitality and tourism and thereby to assess whether the PLS-SEM-based papers followed the recommended application guidelines and to investigate whether a comparison of journal types (hospitality vs tourism) and journal qualities (top-tier vs other leading) reveal significant differences in PLS-SEM use.

Design/methodology/approach

A total of 206 PLS-SEM based papers published between 2000 and April 2017 in the 19 SSCI-indexed hospitality and tourism journals were critically analyzed using a wide range of guidelines for the following aspects of PLS-SEM: the rationale of using the method, the data characteristics, the model characteristics, the model assessment and reporting the technical issues.

Findings

The results reveal that some aspects of PLS-SEM are correctly applied by researchers, but there are still some misapplications, especially regarding data characteristics, formative measurement model evaluation and structural model assessment. Furthermore, few significant differences were found on the use of PLS-SEM between the two fields (hospitality and tourism) and between the journal tiers (top-tier and other leading).

Practical implications

To enhance the quality of research in hospitality and tourism, the present study provides recommendations for improving the future use of PLS-SEM.

Originality/value

The present study fills a sizeable gap in hospitality and tourism literature and extends the previous assessments on the use of PLS-SEM by providing a wider perspective on the issue (i.e. includes both hospitality and tourism journals rather than the previous reviews that focus on either tourism or hospitality), using a larger sample size of 206 empirical studies, investigating the issue over a longer time period (from 2000 to April, 2017, including the in-press articles), extending the scope of criteria (guidelines) used in the review and comparing the PLS-SEM use between the two allied fields (hospitality and tourism) and between the journal tiers (top-tier and other leading).

Details

International Journal of Contemporary Hospitality Management, vol. 30 no. 11
Type: Research Article
ISSN: 0959-6119

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Article
Publication date: 8 January 2018

Faizan Ali, Woo Gon Kim, Jun (Justin) Li and Cihan Cobanoglu

Structural equation modelling (SEM) has increasingly been used by hospitality and tourism researchers to examine complex relationships. This paper aims to highlight the…

Abstract

Purpose

Structural equation modelling (SEM) has increasingly been used by hospitality and tourism researchers to examine complex relationships. This paper aims to highlight the benefits and limitations of SEM for hospitality and tourism research and compare its two main approaches, i.e. covariance-based SEM (CB-SEM) and partial least squares-SEM (PLS-SEM).

Design/methodology/approach

By using a comparative approach, this study parallels SEM’s two main approaches, i.e. CB-SEM and PLS-SEM, using three different examples from hospitality and tourism industry. Both the approaches are compared side by side in terms of assumptions, validity and reliability of measurement models, item retention and loadings, strength and significance of path relationships and coefficient of determinations.

Findings

The findings show that even though both methods analyse measurement theory and structural path models, there are relatively higher advantages for hospitality and tourism researchers in applying PLS-SEM.

Research limitations/implications

Because of the limitations of only using three examples, the results and trends generated in this study may not be generalized to all research in hospitality and tourism discipline. Moreover, the Likert scale has been used to measure the constructs in both the studies, which may have biased the results.

Originality value

This study is the first to compare the usage of both the SEM approaches in hospitality and tourism research. The findings of this study provide significant implications and directions for hospitality and tourism researchers to apply PLS-SEM in the future.

Details

International Journal of Contemporary Hospitality Management, vol. 30 no. 1
Type: Research Article
ISSN: 0959-6119

Keywords

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