Should I use reflective or formative construct?

Research topics can be discussed in this area.
Post Reply
Marsha Sabrina
PLS Junior User
Posts: 3
Joined: Sun Apr 17, 2022 11:41 am
Real name and title: Marsha Sabrina Lillah

Should I use reflective or formative construct?

Post by Marsha Sabrina »

Dear All,

I have an observed firm performance as dependent variable (i.e. performance measured by ROA, ROE, Tobin's Q, and market to book ratio). Then the independent variable are three type of ownership structure (foreign, managerial, and state ownership). The mediation variable is independent commisioner.
So i am confused how should i model this observed?. Should it be a formative construct or a reflective construct?. Thanks
UmangVarshney
PLS Junior User
Posts: 1
Joined: Wed Jun 29, 2022 8:40 am
Real name and title: Umang Varshney

Re: Should I use reflective or formative construct?

Post by UmangVarshney »

Hi,
You should go for the formative construct. To understand the reasoning you can read the following paper. It has very nicely explained the difference between the reflective and formative scales.
Petter, S., Straub, D., & Rai, A. (2007). Specifying formative constructs in information systems research. MIS quarterly, 623-656.

All the best!
Marsha Sabrina
PLS Junior User
Posts: 3
Joined: Sun Apr 17, 2022 11:41 am
Real name and title: Marsha Sabrina Lillah

Re: Should I use reflective or formative construct?

Post by Marsha Sabrina »

Hello Sir, thanks a lot for your answer!
Anyway may i ask again?. I've did a formative construct for my data, but all the outer weight is red. Do you have any suggest for my problem?. Thank you
Post Reply