How to Specify, Estimate, and Validate Higher-Order Constructs in PLS-SEM

Australasian Marketing Journal, 27(3), 197-211, 2019

Posted: 12 Nov 2019

See all articles by Marko Sarstedt

Marko Sarstedt

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

Joseph F. Hair

Kennesaw State University

Jacky Cheah

affiliation not provided to SSRN

Jan-Michael Becker

University of Cologne - Department of Marketing and Brand Management

Christian M. Ringle

Hamburg University of Technology (TUHH)

Date Written: 2019

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.

Keywords: Hierarchical component models, Higher-order constructs, Partial least squares, Path modeling, PLS-SEM, Second-order constructs

Suggested Citation

Sarstedt, Marko and Hair, Joseph F. and Cheah, Jacky and Becker, Jan-Michael and Ringle, Christian M., How to Specify, Estimate, and Validate Higher-Order Constructs in PLS-SEM (2019). Australasian Marketing Journal, 27(3), 197-211, 2019, Available at SSRN: https://ssrn.com/abstract=3479064

Marko Sarstedt (Contact Author)

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

Joseph F. Hair

Kennesaw State University ( email )

1000 Chastain Rd
Kennesaw, GA 30144
United States

Jacky Cheah

affiliation not provided to SSRN

Jan-Michael Becker

University of Cologne - Department of Marketing and Brand Management ( email )

Albertus-Magnus-Platz 1
Cologne, 50931
Germany

Christian M. Ringle

Hamburg University of Technology (TUHH) ( email )

Am Schwarzenberg-Campus 4
Hamburg, 21073
Germany

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

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