Product Indicator Approach/interaction effects

Questions about the implementation and application of the PLS-SEM method, that are not related to the usage of the SmartPLS software.
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nayabeyes
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Product Indicator Approach/interaction effects

Post by nayabeyes »

Hello,
Greetings
From the last few days I am trying to learn the Product Indicator Approach (Chin et al., 1996) for interaction effects but still I could not understand it. Therefore, I would be very thankful if anyone could facilitate me in this regard and if could share some solved solutions for finding interaction effects using The Product Indicator Approach and whether we can use SmartPLS to calculate interaction effects.
MURAD ALI, Ph.D
iRose
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Post by iRose »

Product indicator approach is one of the approaches that we can use to calculate interaction effects. Assuming your independent variable, X1, has 5 items (or manifest variables) and your other independent variable or a moderator, X2, has 3 manifest variables. Hence, there are 15 product indicators, i.e.

X1 ~ A1, A2, A3, A4, A5
X2 ~ B1, B2, B3
Interaction between X1 and X2 ~ A1*B1, A1*B2, A1*B3, A2*B1, A2*B2, A2*B3, ...A5*B3


Yes, you can calculate the interaction effect using SmartPLS. If you draw your model such that it has X1 (independent variable 1), X2 (independent variable 2 or a moderator) and Y (dependent variable), you can right click on your Y latent variable and choose "Create Moderating Effect". When the wizard page pops up, choose (a) a moderator variable, (b) a predictor variable, and (c) interaction effect term generation. Then, click "Finish" and you'll find your interaction variable in the diagram. However, the product indicators may be hidden. To show these indicators, simply right click on the interaction variable and choose "Hide/Show Measurement Model".

To obtain the path coefficient for the interaction effect, run PLS algorithm and to determine its significance, run Bootstrapping procedure.

Hope this info helps.
nayabeyes
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Thanking message

Post by nayabeyes »

Dear Ismail,
Really thank you for your kind guidance. I will follow your instructions.
MURAD ALI, Ph.D
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