Discriminant validity assessment has become a generally accepted prerequisite for analyzing relationships between latent variables. For variance-based structural equation modeling, such as partial least squares, the Fornell-Larcker criterion and the examination of cross-loadings are the dominant approaches for evaluating discriminant validity. By means of a simulation study, we show that these approaches do not reliably detect the lack of discriminant validity in common research situations. We therefore propose an alternative approach, based on the multitrait-multimethod matrix, to assess discriminant validity: the heterotrait-monotrait ratio of correlations. We demonstrate its superior performance by means of a Monte Carlo simulation study, in which we compare the new approach to the Fornell-Larcker criterion and the assessment of (partial) cross-loadings. Finally, we provide guidelines on how to handle discriminant validity issues in variance-based structural equation modeling.

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A new criterion for assessing discriminant validity in variance-based structural equation modeling

Most methodological fields undertake regular critical reflections to ensure rigorous research and publication practices, and, consequently, acceptance in their domain. Interestingly, relatively little attention has been paid to assessing the use of partial least squares structural equation modeling (PLS-SEM) in marketing research—despite its increasing popularity in recent years. To fill this gap, we conducted an extensive search in the 30 top ranked marketing journals that allowed us to identify 204 PLS-SEM applications published in a 30-year period (1981 to 2010). A critical analysis of these articles addresses, amongst others, the following key methodological issues: reasons for using PLS-SEM, data and model characteristics, outer and inner model evaluations, and reporting. We also give an overview of the interdependencies between researchers’ choices, identify potential problem areas, and discuss their implications. On the basis of our findings, we provide comprehensive guidelines to aid researchers in avoiding common pitfalls in PLS-SEM use. This study is important for researchers and practitioners, as PLS-SEM requires several critical choices that, if not made correctly, can lead to improper findings, interpretations, and conclusions.

An assessment of the use of partial least squares structural equation modeling in marketing research

https://isiarticles.com/bundles/Article/pre/pdf/41674.pdf

Foreign investors' interests and corporate tax avoidance: Evidence from an emerging economy

Information and communications technologies ICTs have enabled the rise of so-called "Collaborative Consumption" CC: the peer-to-peer-based activity of obtaining, giving, or sharing the access to goods and services, coordinated through community-based online services. CC has been expected to alleviate societal problems such as hyper-consumption, pollution, and poverty by lowering the cost of economic coordination within communities. However, beyond anecdotal evidence, there is a dearth of understanding why people participate in CC. Therefore, in this article we investigate people's motivations to participate in CC. The study employs survey data N=168 gathered from people registered onto a CC site. The results show that participation in CC is motivated by many factors such as its sustainability, enjoyment of the activity as well as economic gains. An interesting detail in the result is that sustainability is not directly associated with participation unless it is at the same time also associated with positive attitudes towards CC. This suggests that sustainability might only be an important factor for those people for whom ecological consumption is important. Furthermore, the results suggest that in CC an attitude-behavior gap might exist; people perceive the activity positively and say good things about it, but this good attitude does not necessary translate into action.

The sharing economy: Why people participate in collaborative consumption

SmartPLS is one of the prominent software applications for Partial Least Squares Structural Equation Modeling (PLS-SEM). It was developed by Ringle, Wende & Will (2005). The software has gained popularity since its launch in 2005 not only because it is freely available to academics and researchers, but also because it has a friendly user interface and advanced reporting features. Although an extensive number of journal articles have been published on the topic of PLS modeling, the amount of instructional materials available for this software is limited. This paper is written to address this knowledge gap and help beginners to understand how PLS-SEM can be used in marketing research.

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BJ Babin

Papers

Multivariate Data Analysis (7th ed.