confirmatory tetrad analysis in pls path modeling

Confirmatory tetrad analysis in PLS path modeling Siegfried P. Gudergan a, ⁎ , Christian M. Ringle b, 1 , Sven Wende b, 2 , Alexander Will b, 2 a University of Technology Sydney, Australia b University of Hamburg, Faculty of Business, Economics and Social Sciences, Industrial Management, Von-Melle-Park 5, 20146 Hamburg, Germany Received 1 May 2007; received in revised form 1 November 2007; accepted 1 January 2008 Abstract The authors propose a CTA-PLS assessment routine for measurement models. This routine applies confirmatory tetrad analysis (CTA) in a manner whic h isconsiste nt with part ial lea st squa res(PLS) pat h mod elin g assu mpt ions. The conc eptualizat ionemploy sa boot strapp ing procedu re to acco mpli sh an appropriate statistical test examining vanishing tetrads in CTA-PLS. The approach allows distinguishing a formative indicator specification from a reflective indicator specification. Applications using experimental and empirical data demonstrate the usefulness and effectiveness of CTA-PLS. As a means of evaluating PLS path modeling results, the routine assists researchers in avoiding potentially unrepresentative consequences of measurement model misspecification. © 2008 Elsevier Inc. All rights reserved. Keywords: Confirmatory tetrad analysis; Partial least squares; Path modeling; Measurement model evaluation 1. Reflective and formative measurement models in partial least squares path modeling The partial least squares (PLS) path modeling methodology (Lohmöller , 1989) allows reflective and formative computations with respect to the measurement of latent variables. Although PLS path modeling represents a well-substantiated method for estimating complex cause–effect-relationship models in business research, limited work has been done on the assessment of the mode of measurement models in general, and the appro- priateness of using formative measurement models in PLS path model ing in part icular . Sever al tests for exami ning the reli - ability of reflective measurement models exist but the academic literature shows an inadequate emphasis on statistical methods that assist in evalu ating format ive measu remen t model s and the manifest variables (indicators) that form those composite variables (i.e., indexes). Formative measurement models (c.f. Diamantopoulos, 2006) come into use when an explanatory combination of indicator vari able s unde rli es the lat ent cons truct. Bus ines s rese arch studie s typ ica lly tes t for mat ive ind ica tor var iab les for the ir val id- ity using theoretic rationale and expert opinion (e.g., Rossiter, 2002), while commonly examining reflective measures using a ran ge of tec hni que s of sca le constr uction and mea sureme nt assessment inclu ding factor analy sis (Spear man, 1904 ) an d classical test theory (Lord and Novick, 1968). An evaluation of refl ective measu remen t models concerns unidi mensi onali ty . However, this logic is to some extend inappropriate in the case of formative measurement models ( Bollen and Lennox, 1991). In a similar vein, Diamantopoulos and Winklhofer (2001) point out that conve ntion al proc edures – whic h researchers commonly employ to examine the validity and reliability of measurement models of the reflective mode (e.g., confirmatory factor analysis and assessment of internal consistency) – are not suitable for the formative mode. Much of the problem surrounding the absence of formative indic ator testing is attr ibut able to constr uct or measu remen t Available online at www.sciencedirect.com Journal of Business Research 61 (2008) 1238 – 1249 ⁎ Corres pondin g autho r. Univer sity of Te chnolo gy Sydn ey, School of Marketing, City Campus, 1-59 Quay Street, Haymarket, NSW 2007, Australia. Tel.: +61 2 9514 3530; fax: +61 2 9514 3535. E-mail addresses: [email protected] (S.P. Gudergan), [email protected] (C.M. Ringle), [email protected] (S. We nde), [email protected] (A. Will). 1 Tel.: +49 40 42838 4682; fax: +49 40 42838 6496. 2 Tel.: +49 40 42838 5521; fax: +49 40 42838 6496. 0148-2963/$ - see front matter © 2008 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2008.01.012

confirmatory tetrad analysis in pls path modeling

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