Partial least squares structural equation modeling (PLS-SEM): A useful tool for family business researchers

Marko Sarstedt, Christian Ringle, Donna Smith, Russell Reams and Joseph F. Hair

Journal of Family Business Strategy, 2014, vol. 5, issue 1, 105-115

Abstract: Structural equation modeling (SEM) has become a mainstream method in many fields of business research, but its use in family business research remains in its infancy. This lag in SEM's application holds especially true for partial least squares SEM (PLS-SEM), an alternative to covariance-based SEM, which provides researchers with more flexibility in terms of data requirements, model complexity and relationship specification. This article draws attention to PLS-SEM as an opportunity to advance the development and testing of theory in family business research by providing a non-technical introduction into the basic concepts and issues of PLS-SEM, bearing the needs of potential users in mind. To this end, a systematic procedure for PLS-SEM results evaluation is presented and applied to an annotated example. The article also illustrates the analysis of mediating effects, which researchers are increasingly testing in their models.

Keywords: Partial least squares; Structural equation modeling; PLS-SEM; Mediation; Family business research (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (553)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:fambus:v:5:y:2014:i:1:p:105-115

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DOI: 10.1016/j.jfbs.2014.01.002

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