Reasons for HOM

The main reasons to include higher order model t is to reduce the number of relationships in the structural model, making the PLS path model more parsimonious and easier to grasp (Hair et al., 2014).

Technical Consideration

The PLS path modeling algorithm requires that every latent variable has at least one manifest indicator. Phantom variables are not possible.

Solution: Repeated-indicator approach (Wold, 1982; Lohmoller, 1989).

Types of 2^nd Order Construct

There are 4 possible types of second-order constructs:

Exercise

Exercise 1: Download data set here, draw the model below and analyze.

Exercise 2: Download the dataset here, and draw the model below.

Exercise 3: Download a project here.

Further Readings

Nawanir, G., Fernando, Y., & Lim, K. T. (2018). A Second-order Model of Lean Manufacturing Implementation to Leverage Production Line Productivity with the Importance-Performance Map Analysis. Global Business Review, 19(3_suppl), S114-S129. doi:10.1177/0972150918757843 Click here.

Nawanir, G., Lim, K. T., Othman, S. N., & Adeleke, A. Q. (2018). Developing and validating lean manufacturing constructs: an SEM approach. Benchmarking: An International Journal, 25(5), 1382-1405. doi:doi:10.1108/BIJ-02-2017-0029. Click here.