Should PLS become factor-based or should CB-SEM become composite-based? Both!

Jörg Henseler*, Florian Schuberth

*Corresponding author for this work

Research output: Contribution to journalReview articleAcademicpeer-review

3 Citations (Scopus)

Abstract

This paper critically discusses a recent EJIS paper entitled “Will PLS have to become factor-based to survive and thrive?”, which laments that covariance-based structural equation modelling cannot handle composite models, postulates that PLS should become factor-based, and advocates the use of the PLSF-SEM method. We clarify that covariance-based structural equation modelling can handle composite models, e.g. using the so-called Henseler – Ogasawara specification, agree that PLS in its original form cannot consistently estimate the parameters of reflective measurement models, and reiterate that consistent PLS is a viable means to overcome this limitation. Finally, we study the performance of PLSF-SEM through scenario analyses. Based on our results, we conclude that PLSF-SEM is inferior to covariance-based structural equation modelling and consistent PLS in almost all respects. Therefore, we cannot currently recommend the use of PLSF-SEM, and it is up to future research to demonstrate potential advantages over existing structural equation modelling techniques.
Original languageEnglish
JournalEuropean journal of information systems
Early online date23 May 2024
DOIs
Publication statusE-pub ahead of print/First online - 23 May 2024

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