Instructor:

Dr. Shazia Kousar

Assistant Professor, Superior University
Lahore
Contents:

•Introduction to Structure Equation Modeling (SEM)

•Fundamentals of PLS-SEM
•Assumptions to use Smart PLS
•Introduction to Smart PLS Interface
•Basic Modeling in PLS
•Measurement Model Assessment (CFA)
Convergent validity
Discriminant Validity (HTMT)
Factor Loadings & Cross Loadings
•Structure Model Assessment (SEM)
•Mediation Analysis
•Moderation Analysis
•Interpretation & Reporting of Findings
1st vs 2nd Generation Technique
Primarily Primarily
exploratory confirmatory
• multiple • correspondence
.
regression analysis
• logistic
.
1st regression
• analysis of
Generation
variance
Techniques • cluster
analysis
• exploratory
factor analvsis
2nd CB-SEM,
including
Generation PLS-SEM
CFA
Techniaues
•
Structure Equation Modeling (SEM):

 SEM is a second-generation statistical modeling technique

that allows the simultaneous modeling of relationships among
multiple independent and dependent constructs (Gefen,
Straub, & Boudreau, 2000).

SEM is used to explore or confirm the theory

 Structure
Equation
Modelin
g

PLS-SEM
CB-
(Variance
Based
Based SEM)
SEM
PLS-SEM is used to
develop theories and
CB-Based SEM used to usually for exploratory
confirm or reject studies
theories
Software's for CB-Based Software's for PLS-
SEM SEM

AMOS SMART PLS

EQS PLS-GUI
SEPATH PLS Graph
LISREL WarpPLS
MPLUS Visual PLS
lavaan SPAD-PLS
Ωnyx ADANCO
 Rules of Thumb for choosing PLS-SEM

We prefer PLS-SEM technique when:

The sample size is small.
The data are not normally distributed
The structural model is complex (many constructs and many
indicators)
We have more than one underpinning theories to support model
The goal is to predicting key target constructs.
The purpose is to build or predict theory, not to test the theory
The formative constructs are the part of structural model
Smart PLS

 A structural equation modeling (SEM) process

requires
two steps:

1. Building and testing a measurement model.

2. Building and testing a structural model.
Modeling in PLS
Inner Model

Outer Model Outer Model

Exogenous Endogenous
 Measurement Model
We use CFA technique in measurement model

Measurement model is used to measure the construct validity

Construct
Validity

Co
nve Discr
rgent imi
nant
Validity Validity
•Factor loadings. •Fornell-Larcker Criterion
•Average Variance extracted •HTMT (Heterotrait-Monotrait
(AVE).
Ratio)
•Reliability.
 Validation of the measurement models is a
requirement for assessing the structural model
Exploratory Factor Analysis (EFA)

Vs

Confirmatory Factor Analysis (CFA)

 Note:
Independent variable is also known as Exogenous Variables in
PLS
 Dependent variable is also known as Endogenous Variables in
PLS
Before going to start work in PLS, we need to save our SPSS
file in
CSV format.
After saving your file in CSV format, next step is to attach
CSV file with your Smart PLS.
Abbreviation used in SPSS:

Adv Advertisement
BI Brand Image
SP Sales Promotion
PI Purchase Intentions
 How to
Rename Construct:

How to Rotate Construct Items:

How to Run CFA
For Measurement Model
 HTMT value near to 1 indicates the lack of discriminant validity.

Threshold values for HTMT:

< 0.85 (kline, 2011)

<0.90 (Gold et al., 2001)
HTMT Inference (Use Bootstrapping )
Structure Equation Modeling (SEM)
Structure Equation Modeling (SEM)
 According to Barron and Kenny (1986)

According to Hayes (2008), Hayes (2013)

Mediation
Effect Size:
0.02……...Small
0.15……. Medium
0.35……..Large
 How to Calculate Q2 (Blinfolding)

Note:
If Q2 >0, no issue with blind folding
Blind folding use for Predictive relevance (Stone, 1974;
Geisser,
1974).
Blindfolding is only applicable for latent variable and reflective
scale
measurement.
Reporting of
Results
SEM Results