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CB-SEM
CB-SEM
VB-SEM
VB-SEM
Nature of Research
Nature of Research
Exploratory Quantitative Research
Exploratory Quantitative Research
Research into the unknown.
Predicting, developing, & exploring theory or theories.
Not supported or only partially supported by theory & literature.
What is going on here, how we explain it?
Confirmatory Quantitative Research
Confirmatory Quantitative Research
When we have a pretty good idea about what's going on.
Testing, comparing, & conforming a theory or theories.
Must be supported by strong theory & solid literature.
Is it true what we believe based on the existing theory & literature?
Types of Analysis
Types of Analysis
VB-SEM vs CB-SEM
VB-SEM vs CB-SEM
Source: Heir et al. (2013)
The Choice
The Choice
In case of theory is less developed, researchers should consider VB-SEM as an alternative to CB-SEM.
Once VB-SEM is employed, the study is considered exploratory.
Reasons of Using PLS (Chin, 1998; Chin & Newsted, 1999)
Reasons of Using PLS (Chin, 1998; Chin & Newsted, 1999)
The phenomenon to be investigated is relatively new & measurement models need to be newly developed.
The structural equation model is complex with a large number of latent variables & manifest variables.
Relationships between the indicators and latent variables have to be modeled in different modes (i.e., formative & reflective).
The conditions relating to sample size & normal distribution are not met.
Prediction is more important than parameter estimation.
In situations where prior theory is strong and further testing and development are the goal, CB-SEM is more appropriate.
However, for application & prediction, when the phenomenon under research is relatively new or changing, or when the theoretical model or measures are not well formed, a PLS approach is often more suitable (Chin& Newsted, 1999)
Misuse of SEM Approach
Misuse of SEM Approach
Data characteristics are among the most often stated reasons for applying PLS-SEM (Hair et al., 2017; Henseler et al., 2015).
Small sample size is the most often abused argument associated with the use of PLS-SEM (Goodhue et al., 2012; Marcoulides & Saunders, 2006).
Rules of Thumb for Selecting CB-SEM or VB-SEM
Rules of Thumb for Selecting CB-SEM or VB-SEM
Source: Hair et al. (2011), Ramayah et al., (2018)
Further Readings
Further Readings
Astrachan, C. B., Patel, V. K., & Wanzenried, G. (2014). A comparative study of CB-SEM and PLS-SEM for theory development in family firm research. Journal of Family Business Strategy, 5(1), 116-128. Click here.
Chin, W. W., & Newsted, P. R. (1999). Structural equation modeling analysis with small samples using partial least squares. Statistical strategies for small sample research, 1(1), 307-341. Click here.
Hair Jr, J. F., Matthews, L. M., Matthews, R. L., & Sarstedt, M. (2017). PLS-SEM or CB-SEM: updated guidelines on which method to use. International Journal of Multivariate Data Analysis, 1(2), 107-123. Click here.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2 ed.). Thousand Oaks, CA: Sage. Click here.
Rigdon, E. E., Sarstedt, M., & Ringle, C. M. (2017). On comparing results from CB-SEM and PLS-SEM: Five perspectives and five recommendations. Marketing Zfp, 39(3), 4-16. Click here.
Sarstedt, M., Hair, J. F., Ringle, C. M., Thiele, K. O., & Gudergan, S. P. (2016). Estimation issues with PLS and CBSEM: Where the bias lies! Journal of Business Research, 69(10), 3998-4010. Click here.
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