How to model HCM

[sandra1412]

Dear all,

how can I model and run the reflective-formative second order model in Smart PLS correctly? See attachment

Thanks in advance!

Best regards

[cringle]

Principally, you may consider can following the two-stage approach (see Hair et al. 2018; https://goo.gl/b5oeuE) or the modified repeated indicator approach as suggested by Becker et al. for reflective-formative hierarchical component models.

Becker, J.-M., Klein, K., & Wetzels, M. (2012). Hierarchical Latent Variable Models in PLS-SEM: Guidelines for Using Reflective-Formative Type Models. Long Range Planning, 45(5-6), 359-394. http://www.sciencedirect.com/science/ar ... 0112000611

In the latter case, conduct the following steps:

1. Assign the indicators to you first-order constructs. Make sure that the measurement of the first-order constructs use Mode A (correlation weights), which is equivalent with arrows from the construct to the indicators in SmartPLS; alternatively, double-click on the first-order constructs and, under the options that appear in SmartPLS, select "Mode A" for these constructs.

2. Assign all indicators used for the first-order constructs as indictors to the second-order construct (repeated use of indicators). For the estimation of the second-order construct use Mode B (i.e., regression weights), which is equivalent with arrows from the indicators to the construct in SmartPLS; alternatively, double-click on the second-order constructs and, under the options that appear thereafter, select "Mode B" for these constructs.

3. Create relationships from the first-order constructs to the second-order construct.

4. If your second-order construct depends on other constructs, which are not a lower order construct (e.g., construct Y; this is not the case in your example), then create a relationship from construct Y to the relevant second-order construct and all its first-order construct (see Becker et al. for further explanations). For the relationship of this particular construct Y to the second-order construct, analyze the total effects, which you can also bootstrap in SmartPLS.

We hope that these explanations clarify things.

Best regards,
Christian