IDEAS home Printed from https://ideas.repec.org/a/eee/aumajo/v27y2019i3p197-211.html
   My bibliography  Save this article

How to specify, estimate, and validate higher-order constructs in PLS-SEM

Author

Listed:
  • Sarstedt, Marko
  • Hair, Joseph F.
  • Cheah, Jun-Hwa
  • Becker, Jan-Michael
  • Ringle, Christian M.

Abstract

Higher-order constructs, which facilitate modeling a construct on a more abstract higher-level dimension and its more concrete lower-order subdimensions, have become an increasingly visible trend in applications of partial least squares structural equation modeling (PLS-SEM). Unfortunately, researchers frequently confuse the specification, estimation, and validation of higher-order constructs, for example, when it comes to assessing their reliability and validity. Addressing this concern, this paper explains how to evaluate the results of higher-order constructs in PLS-SEM using the repeated indicators and the two-stage approaches, which feature prominently in applied social sciences research. Focusing on the reflective-reflective and reflective-formative types of higher-order constructs, we use the well-known corporate reputation model example to illustrate their specification, estimation, and validation. Thereby, we provide the guidance that scholars, marketing researchers, and practitioners need when using higher-order constructs in their studies.

Suggested Citation

  • Sarstedt, Marko & Hair, Joseph F. & Cheah, Jun-Hwa & Becker, Jan-Michael & Ringle, Christian M., 2019. "How to specify, estimate, and validate higher-order constructs in PLS-SEM," Australasian marketing journal, Elsevier, vol. 27(3), pages 197-211.
    • Handle: RePEc:eee:aumajo:v:27:y:2019:i:3:p:197-211
    DOI: 10.1016/j.ausmj.2019.05.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1441358219301223
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ausmj.2019.05.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Harrigan, Paul & Soutar, Geoff & Choudhury, Musfiq Mannan & Lowe, Michelle, 2015. "Modelling CRM in a social media age," Australasian marketing journal, Elsevier, vol. 23(1), pages 27-37.
    2. Sarstedt, Marko & Wilczynski, Petra & Melewar, T.C., 2013. "Measuring reputation in global markets—A comparison of reputation measures’ convergent and criterion validities," Journal of World Business, Elsevier, vol. 48(3), pages 329-339.
    3. Joseph F. Hair & G. Tomas M. Hult & Christian M. Ringle & Marko Sarstedt & Kai Oliver Thiele, 2017. "Mirror, mirror on the wall: a comparative evaluation of composite-based structural equation modeling methods," Journal of the Academy of Marketing Science, Springer, vol. 45(5), pages 616-632, September.
    4. Marko Sarstedt & Erik Mooi, 2019. "A Concise Guide to Market Research," Springer Texts in Business and Economics, Springer, edition 3, number 978-3-662-56707-4, December.
    5. Relling, Marleen & Schnittka, Oliver & Ringle, Christian M. & Sattler, Henrik & Johnen, Marius, 2016. "Community Members' Perception of Brand Community Character: Construction and Validation of a New Scale," Journal of Interactive Marketing, Elsevier, vol. 36(C), pages 107-120.
    6. Lăcrămioara Radomir & Alan Wilson, 2018. "Corporate Reputation: The Importance of Service Quality and Relationship Investment," International Series in Operations Research & Management Science, in: Necmi K. Avkiran & Christian M. Ringle (ed.), Partial Least Squares Structural Equation Modeling, chapter 0, pages 77-123, Springer.
    7. Jarvis, Cheryl Burke & MacKenzie, Scott B & Podsakoff, Philip M, 2003. "A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(2), pages 199-218, September.
    8. Patel, Vijay K. & Manley, Scott C. & Hair, Joseph F. & Ferrell, O.C. & Pieper, Torsten M., 2016. "Is stakeholder orientation relevant for European firms?," European Management Journal, Elsevier, vol. 34(6), pages 650-660.
    9. Necmi K. Avkiran & Christian M. Ringle (ed.), 2018. "Partial Least Squares Structural Equation Modeling," International Series in Operations Research and Management Science, Springer, number 978-3-319-71691-6, December.
    10. Gudergan, Siegfried P. & Ringle, Christian M. & Wende, Sven & Will, Alexander, 2008. "Confirmatory tetrad analysis in PLS path modeling," Journal of Business Research, Elsevier, vol. 61(12), pages 1238-1249, December.
    11. Manfred Schwaiger, 2004. "Components And Parameters Of Corporate Reputation – An Empirical Study," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 56(1), pages 46-71, January.
    12. Shmueli, Galit & Ray, Soumya & Velasquez Estrada, Juan Manuel & Chatla, Suneel Babu, 2016. "The elephant in the room: Predictive performance of PLS models," Journal of Business Research, Elsevier, vol. 69(10), pages 4552-4564.
    13. Jun-Hwa Cheah & Hiram Ting & T. Ramayah & Mumtaz Ali Memon & Tat-Huei Cham & Enrico Ciavolino, 2019. "A comparison of five reflective–formative estimation approaches: reconsideration and recommendations for tourism research," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(3), pages 1421-1458, May.
    14. Hourigan, Sally Rebecca & Bougoure, Ursula-Sigrid, 2012. "Towards a better understanding of fashion clothing involvement," Australasian marketing journal, Elsevier, vol. 20(2), pages 127-135.
    15. Clay M. Voorhees & Michael K. Brady & Roger Calantone & Edward Ramirez, 2016. "Discriminant validity testing in marketing: an analysis, causes for concern, and proposed remedies," Journal of the Academy of Marketing Science, Springer, vol. 44(1), pages 119-134, January.
    16. Marko Sarstedt & Erik Mooi, 2019. "The Market Research Process," Springer Texts in Business and Economics, in: A Concise Guide to Market Research, edition 3, chapter 2, pages 11-24, Springer.
    17. Marko Sarstedt & Jun-Hwa Cheah, 2019. "Partial least squares structural equation modeling using SmartPLS: a software review," Journal of Marketing Analytics, Palgrave Macmillan, vol. 7(3), pages 196-202, September.
    18. Marko Sarstedt & Christian M Ringle & Jun-Hwa Cheah & Hiram Ting & Ovidiu I Moisescu & Lacramioara Radomir, 2020. "Structural model robustness checks in PLS-SEM," Tourism Economics, , vol. 26(4), pages 531-554, June.
    19. Sascha Raithel & Manfred Schwaiger, 2015. "The effects of corporate reputation perceptions of the general public on shareholder value," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 945-956, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marko Sarstedt & Jun-Hwa Cheah, 2019. "Partial least squares structural equation modeling using SmartPLS: a software review," Journal of Marketing Analytics, Palgrave Macmillan, vol. 7(3), pages 196-202, September.
    2. Nicole F. Richter & Sven Hauff & Christian M. Ringle & Siegfried P. Gudergan, 2022. "The Use of Partial Least Squares Structural Equation Modeling and Complementary Methods in International Management Research," Management International Review, Springer, vol. 62(4), pages 449-470, August.
    3. Marko Sarstedt & Christian M Ringle & Jun-Hwa Cheah & Hiram Ting & Ovidiu I Moisescu & Lacramioara Radomir, 2020. "Structural model robustness checks in PLS-SEM," Tourism Economics, , vol. 26(4), pages 531-554, June.
    4. Basco, Rodrigo & Hair, Joseph F. & Ringle, Christian M. & Sarstedt, Marko, 2022. "Advancing family business research through modeling nonlinear relationships: Comparing PLS-SEM and multiple regression," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    5. Jun-Hwa Cheah & Hiram Ting & T. Ramayah & Mumtaz Ali Memon & Tat-Huei Cham & Enrico Ciavolino, 2019. "A comparison of five reflective–formative estimation approaches: reconsideration and recommendations for tourism research," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(3), pages 1421-1458, May.
    6. Cheah, Jun-Hwa & Waller, David & Thaichon, Park & Ting, Hiram & Lim, Xin-Jean, 2020. "Price image and the sugrophobia effect on luxury retail purchase intention," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    7. Svenja Damberg & Manfred Schwaiger & Christian M. Ringle, 2022. "What’s important for relationship management? The mediating roles of relational trust and satisfaction for loyalty of cooperative banks’ customers," Journal of Marketing Analytics, Palgrave Macmillan, vol. 10(1), pages 3-18, March.
    8. Wang, Siqi & Cheah, Jun-Hwa & Lim, Xin-Jean & Leong, Yee Choy & Choo, Wei Chong, 2022. "Thanks COVID-19, I'll reconsider my purchase: Can fear appeal reduce online shopping cart abandonment?," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    9. Svenja Damberg & Yide Liu & Christian M. Ringle, 2024. "Does culture matter? Corporate reputation and sustainable satisfaction in the Chinese and German banking sector," Journal of Marketing Analytics, Palgrave Macmillan, vol. 12(1), pages 6-24, March.
    10. Danks, Nicholas P. & Sharma, Pratyush N. & Sarstedt, Marko, 2020. "Model selection uncertainty and multimodel inference in partial least squares structural equation modeling (PLS-SEM)," Journal of Business Research, Elsevier, vol. 113(C), pages 13-24.
    11. Hair, Joseph F. & Astrachan, Claudia Binz & Moisescu, Ovidiu I. & Radomir, Lăcrămioara & Sarstedt, Marko & Vaithilingam, Santha & Ringle, Christian M., 2021. "Executing and interpreting applications of PLS-SEM: Updates for family business researchers," Journal of Family Business Strategy, Elsevier, vol. 12(3).
    12. Vaithilingam, Santha & Ong, Chu Sun & Moisescu, Ovidiu I. & Nair, Mahendhiran S., 2024. "Robustness checks in PLS-SEM: A review of recent practices and recommendations for future applications in business research," Journal of Business Research, Elsevier, vol. 173(C).
    13. Liying He & Kamisah Ismail, 2023. "Do staff capacity and performance-based budgeting improve organisational performance? Empirical evidence from Chinese public universities," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-16, December.
    14. Ahrholdt, Dennis C. & Gudergan, Siegfried P. & Ringle, Christian M., 2019. "Enhancing loyalty: When improving consumer satisfaction and delight matters," Journal of Business Research, Elsevier, vol. 94(C), pages 18-27.
    15. Sarstedt, Marko & Wilczynski, Petra & Melewar, T.C., 2013. "Measuring reputation in global markets—A comparison of reputation measures’ convergent and criterion validities," Journal of World Business, Elsevier, vol. 48(3), pages 329-339.
    16. Benjamin Pfister & Manfred Schwaiger & Tobias Morath, 2020. "Corporate reputation and the future cost of equity," Business Research, Springer;German Academic Association for Business Research, vol. 13(1), pages 343-384, April.
    17. Sarker, Moniruzzaman & Mohd-Any, Amrul Asraf & Kamarulzaman, Yusniza, 2021. "Validating a consumer-based service brand equity (CBSBE) model in the airline industry," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    18. Cheah, Jun-Hwa & Lim, Xin-Jean & Ting, Hiram & Liu, Yide & Quach, Sara, 2022. "Are privacy concerns still relevant? Revisiting consumer behaviour in omnichannel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    19. Chi-Yo Huang & Hui-Ya Wang & Chia-Lee Yang & Steven J. H. Shiau, 2020. "A Derivation of Factors Influencing the Diffusion and Adoption of an Open Source Learning Platform," Sustainability, MDPI, vol. 12(18), pages 1-27, September.
    20. Lim, Xin-Jean & Cheah, Jun-Hwa & Ngo, Liem Viet & Chan, Kara & Ting, Hiram, 2023. "How do crazy rich Asians perceive sustainable luxury? Investigating the determinants of consumers’ willingness to pay a premium price," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:aumajo:v:27:y:2019:i:3:p:197-211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/australasian-marketing-journal/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.