Inconsistencies of the PLS-PM approach to structural equation models with formative-reflective schemes


The principal aim of the paper is to show the inconsistencies of  PLS-PM as a statistical tool to estimate structural equation models with formative-reflective schemes. We show that PLS-PM is not suitable to this kind of models, since it may even fail in identifying existing causal links between the variables of concern. We bring evidences of these facts discussing a real-data example and comparing the results by PLS-PM with those obtained by a simpler least squares approach.

DOI Code: 10.1285/i20705948v5n3p333

Keywords: Formative-Reflective models; PLS-PM; Causal models


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