Critique of a published latent variable or SEM study – Statswork
                     CRITIQUE OF A 
PLAUTBELNTIS VHAREIDABLE OR SEM 
STUDY
An Academic presentation by
Dr. Nancy Agens, Head, Technical Operations, 
Statswork  Group www.statswork.com
Email: [email protected]
TODAY'S 
ODuItSlinCeU ofS SION
Topics Introduction
Structural Equation Modelling 
 Difference Between CB and 
PLS  Example for CB SEM
PLS SEM is Better than CB 
SEM  Conclusion
Introductio
n
Structural equation modelling (SEM) becomes a major statistical technique in examining 
 complex research problems in marketing and international business.
The SEM uses covariance based modelling and later few researchers argued to use 
 the partial least square approach for SEM.
Structural Equation Modelling 
(SEM)
Six journals related to the business management and marketing have been considered 
 and the articles related to SEM has been scrutinized for this purpose.
After the classification of methods used, it is found that 379 articles used covariance 
 based SEM and 45 used partial least square based SEM.
Researchers often interested in finding the same results by using these both methods 
 of Structural equation modelling.
Difference Between CB and 
PLS
Covariance Based (CB) Partial Least Square 
(PLS)
The covariance based SEM has a  
strong theoretical background and it  The partial least square SEM is a  
estimates the model by minimizing the discovery oriented approach, it acts  
 covariance matrix of the theoretical  as Predictive Analysis from the latent 
model.  variable score.
it is used to identify the extent of  
empirical fit towards the theoretical It is suitable for modelling complex
 model. business problems.
Example for CB-
SEM
In covariance based SEM, the complexity of the model influence the 
 goodness-of-fit statistics.
For example, consider a chi-square test statistic, then if the complexity of the 
 model or the number of parameters increases then the chi-square value will 
 get decreased.
Hence, the result will be either the correct model or the highly fitted model 
 because of the complexity of the problem.
Table: Number of articles used CB 
and PLS
PLS-SEM is Better than 
CB-SEM
From the results, it is found that only few researchers justified the use of CB-SEM is 
 that to test the theory using statistical hypothesis testing.
In the case of PLS-SEM most of the researchers justified the usage of the proposed 
 model for analysis.
Thus, it is concluded that the PLS-SEM might be a better choice for conducting an 
 analysis for business and management.
Conclusio
n
The PLS-SEM is the best methodology than CB-SEM because often the business industry 
 wants a predictive model to enhance their business standard or in investments.
If the objective is to develop the Theoretical Framework, then the PLS-SEM is appropriate and  
the characteristics such as sample size, assumptions of the distribution, the type of measurement 
 should be considered as secondary one.
A proper sampling methodology should be adopted for the analysis purpose and sample size and 
 its measurement type is also plays a major role in the inference.
However, this may not be the case if you take other field of research.
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