Endogeneity in PLS-SEM: New article!
The article titled “Addressing Endogeneity in International Marketing Applications of Partial Least Squares Structural Equation Modeling,” authored by G. Tomas M. Hult (Michigan State University), Joseph F. Hair (University of South Alabama), Dorian Proksch (HHL Leipzig Graduate School of Management), Marko Sarstedt (OVGU), Andreas Pinkwart (HHL Leipzig Graduate School of Management), and Christian M. Ringle (Hamburg University of Technology) has been accepted for publication in Journal of International Marketing. In this paper, we discuss the issue of endogeneity, which has largely been overlooked by users of partial least squares structural equation modeling (PLS-SEM), a popular method for analyzing complex inter-relationships between observed and latent variables. To identify and treat endogeneity, and create awareness of how to deal with this issue, we introduce a systematic procedure that translates control variables, instrumental variables, and Gaussian copulas into a PLS-SEM framework. We illustrate the procedure’s efficacy by means of empirical data, and offer recommendations to guide international marketing researchers on how to effectively address endogeneity concerns in their PLS-SEM analyses.