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1 – 10 of over 8000In management accounting research, the capabilities of Partial Least Squares Structural Equation Modelling (PLS-SEM) have only partially been utilized. These yet unexploited…
Abstract
In management accounting research, the capabilities of Partial Least Squares Structural Equation Modelling (PLS-SEM) have only partially been utilized. These yet unexploited capabilities of PLS-SEM are a useful tool in the often explorative state of research in management accounting. After reviewing eleven top-ranked management accounting journals through the end of 2013, 37 articles in which PLS-SEM is used are identified. These articles are analysed based on multiple relevant criteria to determine the progress in this research area, including the reasons for using PLS-SEM, the characteristics of the data and the models, and model evaluation and reporting. A special focus is placed on the degree of importance of these analysed criteria for the future development of management accounting research. To ensure continued theoretical development in management accounting, this article also offers recommendations to avoid common pitfalls and provides guidance for the advanced use of PLS-SEM in management accounting research.
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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 to…
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.
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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 benefits…
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.
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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 assess…
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).
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Jörg Henseler and Florian Schuberth
In their paper titled “A Miracle of Measurement or Accidental Constructivism? How PLS Subverts the Realist Search for Truth,” Cadogan and Lee (2022) cast serious doubt on PLS’s…
Abstract
Purpose
In their paper titled “A Miracle of Measurement or Accidental Constructivism? How PLS Subverts the Realist Search for Truth,” Cadogan and Lee (2022) cast serious doubt on PLS’s suitability for scientific studies. The purpose of this commentary is to discuss the claims of Cadogan and Lee, correct some inaccuracies, and derive recommendations for researchers using structural equation models.
Design/methodology/approach
This paper uses scenario analysis to show which estimators are appropriate for reflective measurement models and composite models, and formulates the statistical model that underlies PLS Mode A. It also contrasts two different perspectives: PLS as an estimator for structural equation models vs. PLS-SEM as an overarching framework with a sui generis logic.
Findings
There are different variants of PLS, which include PLS, consistent PLS, PLSe1, PLSe2, proposed ordinal PLS and robust PLS, each of which serves a particular purpose. All of these are appropriate for scientific inquiry if applied properly. It is not PLS that subverts the realist search for truth, but some proponents of a framework called “PLS-SEM.” These proponents redefine the term “reflective measurement,” argue against the assessment of model fit and suggest that researchers could obtain “confirmation” for their model.
Research limitations/implications
Researchers should be more conscious, open and respectful regarding different research paradigms.
Practical implications
Researchers should select a statistical model that adequately represents their theory, not necessarily a common factor model, and formulate their model explicitly. Particularly for instrumentalists, pragmatists and constructivists, the composite model appears promising. Researchers should be concerned about their estimator’s properties, not about whether it is called “PLS.” Further, researchers should critically evaluate their model, not seek confirmation or blindly believe in its value.
Originality/value
This paper critically appraises Cadogan and Lee (2022) and reminds researchers who wish to use structural equation modeling, particularly PLS, for their statistical analysis, of some important scientific principles.
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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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Faizan Ali, S. Mostafa Rasoolimanesh, Marko Sarstedt, Christian M. Ringle and Kisang Ryu
Structural equation modeling (SEM) depicts one of the most salient research methods across a variety of disciplines, including hospitality management. Although for many…
Abstract
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.
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S. Mostafa Rasoolimanesh, Christian M. Ringle, Marko Sarstedt and Hossein Olya
This study aims to propose guidelines for the joint use of partial least squares structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA) to…
Abstract
Purpose
This study aims to propose guidelines for the joint use of partial least squares structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA) to combine symmetric and asymmetric perspectives in model evaluation, in the hospitality and tourism field.
Design/methodology/approach
This study discusses PLS-SEM as a symmetric approach and fsQCA as an asymmetric approach to analyze structural and configurational models. It presents guidelines to conduct an fsQCA based on latent construct scores drawn from PLS-SEM, to assess how configurations of exogenous constructs produce a specific outcome in an endogenous construct.
Findings
This research highlights the advantages of combining PLS-SEM and fsQCA to analyze the causal effects of antecedents (i.e., exogenous constructs) on outcomes (i.e., endogenous constructs). The construct scores extracted from the PLS-SEM analysis of a nomological network of constructs provide accurate input for performing fsQCA to identify the sufficient configurations required to predict the outcome(s). Complementing the assessment of the model’s explanatory and predictive power, the fsQCA generates more fine-grained insights into variable relationships, thereby offering the means to reach better managerial conclusions.
Originality/value
The application of PLS-SEM and fsQCA as separate prediction-oriented methods has increased notably in recent years. However, in the absence of clear guidelines, studies applied the methods inconsistently, giving researchers little direction on how to best apply PLS-SEM and fsQCA in tandem. To address this concern, this study provides guidelines for the joint use of PLS-SEM and fsQCA.
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Joseph F. Hair, Jeffrey J. Risher, Marko Sarstedt and Christian M. Ringle
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…
Abstract
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.
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Wynne Chin, Jun-Hwa Cheah, Yide Liu, Hiram Ting, Xin-Jean Lim and Tat Huei Cham
Partial least squares structural equation modeling (PLS-SEM) has become popular in the information systems (IS) field for modeling structural relationships between latent…
Abstract
Purpose
Partial least squares structural equation modeling (PLS-SEM) has become popular in the information systems (IS) field for modeling structural relationships between latent variables as measured by manifest variables. However, while researchers using PLS-SEM routinely stress the causal-predictive nature of their analyses, the model evaluation assessment relies exclusively on criteria designed to assess the path model's explanatory power. To take full advantage of the purpose of causal prediction in PLS-SEM, it is imperative for researchers to comprehend the efficacy of various quality criteria, such as traditional PLS-SEM criteria, model fit, PLSpredict, cross-validated predictive ability test (CVPAT) and model selection criteria.
Design/methodology/approach
A systematic review was conducted to understand empirical studies employing the use of the causal prediction criteria available for PLS-SEM in the database of Industrial Management and Data Systems (IMDS) and Management Information Systems Quarterly (MISQ). Furthermore, this study discusses the details of each of the procedures for the causal prediction criteria available for PLS-SEM, as well as how these criteria should be interpreted. While the focus of the paper is on demystifying the role of causal prediction modeling in PLS-SEM, the overarching aim is to compare the performance of different quality criteria and to select the appropriate causal-predictive model from a cohort of competing models in the IS field.
Findings
The study found that the traditional PLS-SEM criteria (goodness of fit (GoF) by Tenenhaus, R2 and Q2) and model fit have difficulty determining the appropriate causal-predictive model. In contrast, PLSpredict, CVPAT and model selection criteria (i.e. Bayesian information criterion (BIC), BIC weight, Geweke–Meese criterion (GM), GM weight, HQ and HQC) were found to outperform the traditional criteria in determining the appropriate causal-predictive model, because these criteria provided both in-sample and out-of-sample predictions in PLS-SEM.
Originality/value
This research substantiates the use of the PLSpredict, CVPAT and the model selection criteria (i.e. BIC, BIC weight, GM, GM weight, HQ and HQC). It provides IS researchers and practitioners with the knowledge they need to properly assess, report on and interpret PLS-SEM results when the goal is only causal prediction, thereby contributing to safeguarding the goal of using PLS-SEM in IS studies.
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