Addressing Endogeneity in International Marketing Applications of Partial Least Squares Structural Equation Modeling

Journal of International Marketing, Forthcoming

Posted: 15 Aug 2018

See all articles by G. Tomas M. Hult

G. Tomas M. Hult

Michigan State University

Joseph F. Hair

Kennesaw State University

Dorian Proksch

HHL Leipzig Graduate School of Management

Marko Sarstedt

Otto-von-Guericke-Universität Magdeburg; Otto-von-Guericke-Universität Magdeburg; University of Newcastle (Australia)

Andreas Pinkwart

HHL Leipzig Graduate School of Management

Christian M. Ringle

Hamburg University of Technology (TUHH); Waikato Management School

Date Written: July 31, 2018

Abstract

Partial least squares structural equation modeling (PLS-SEM) has become a key method in international marketing research. Users of PLS-SEM have, however, largely overlooked the issue of endogeneity, which has become an integral component of regression analysis applications. This lack of attention is surprising, given that the PLS-SEM method is grounded in regression analysis for which numerous approaches for handling endogeneity have been proposed. To identify and treat endogeneity, and create awareness of how to deal with this issue, this study introduces a systematic procedure that translates control variables, instrumental variables, and Gaussian copulas into a PLS-SEM framework. We illustrate the procedure's efficacy by means of empirical data, and offer recommendations to guide international marketing researchers on how to effectively address endogeneity concerns in their PLS-SEM analyses.

Keywords: Control Variable, Endogeneity, Gaussian Copula, Instrumental Variable, Omitted Variable, PLS-SEM, Partial Least Squares (PLS), Structural Equation Modeling (SEM)

Suggested Citation

Hult, G. Tomas M. and Hair, Joseph F. and Proksch, Dorian and Sarstedt, Marko and Pinkwart, Andreas and Ringle, Christian M., Addressing Endogeneity in International Marketing Applications of Partial Least Squares Structural Equation Modeling (July 31, 2018). Journal of International Marketing, Forthcoming . Available at SSRN: https://ssrn.com/abstract=3223422

G. Tomas M. Hult

Michigan State University ( email )

East Lansing, MI 48824-1121
United States

Joseph F. Hair

Kennesaw State University ( email )

1000 Chastain Rd
Kennesaw, GA 30144
United States

Dorian Proksch

HHL Leipzig Graduate School of Management ( email )

Jahnallee 59
Leipzig, 04109

Marko Sarstedt

Otto-von-Guericke-Universität Magdeburg ( email )

Universitätspl. 2
PSF 4120
Magdeburg, D-39106
Germany

Otto-von-Guericke-Universität Magdeburg ( email )

Universitätspl. 2
PSF 4120
Magdeburg, D-39106
Germany

University of Newcastle (Australia) ( email )

University Drive
Callaghan, NSW 2308
Australia

Andreas Pinkwart

HHL Leipzig Graduate School of Management ( email )

Jahnallee 59
Leipzig, 04109

Christian M. Ringle (Contact Author)

Hamburg University of Technology (TUHH) ( email )

Schwarzenbergstr. 95 (D)
Hamburg, D-21071
Germany

HOME PAGE: http://www.tuhh.de/hrmo

Waikato Management School ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

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