The Use of Partial Least Squares Path Modeling in International Marketing

The advent of structural equation modeling (SEM) with latent variables has changed the nature of research in international marketing and management. Researchers acknowledge the possibilities of distinguishing between measurement and structural models and explicitly taking measurement error into account. As Gefen, Straub, and Boudreau (2000, p. 6) point out, ‘‘SEM has become de rigueur in validating instruments and testing linkages between constructs.’’ They furthermore distinguish between two families of SEM techniques: covariance-based techniques, as represented by LISREL, and variance-based techniques, of which partial least squares (PLS) path modeling is the most prominent representative. PLS has been used by a growing number of researchers from various disciplines such as strategic management (e.g., Hulland, 1999), management information systems (e.g., Dibbern, Goles, Hirschheim, & Jayatilaka, 2004), e-business (e.g., Pavlou & Chai, 2002), organizational behavior (e.g., Higgins, Duxbury, & Irving, 1992), marketing (e.g., Reinartz, Krafft, & Hoyer, 2004), and consumer behavior (e.g., Fornell & Robinson, 1983). Since 1987, for instance, more than 20 studies using PLS have been published in five top-tier marketing journals (Eggert, 2007) – the majority in