Pls Analisis

Chapter 30

Testing Moderating Effects in PLS Path
Models: An Illustration of Available Procedures
J¨ rg Henseler and Georg Fassott o Abstract Along with the development of scientific disciplines, namely social sciences, hypothesized relationships become increasingly more complex. Besides the examination of direct effects, researchers are more and more interested in moderating effects. Moderating effects are evoked by variables whose variation influences the strength or the direction of a relationship between an exogenous and an endogenous variable. Investigators using partial least squares path modeling need appropriate means to test their models for such moderating effects. We illustrate the identification and quantification of moderating effects in complex causal structures by means of Partial Least Squares Path Modeling. We also show that group comparisons, i.e. comparisons of model estimates for different groups of observations, represent a special case of moderating effects by having the grouping variable as a categorical moderator variable. We provide profound answers to typical questions related to testing moderating effects within PLS path models:
1. How can a moderating effect be drawn in a PLS path model, taking into account that the available software only permits direct effects?
2. How does the type of measurement model of the independent and the moderator variables influence the detection of moderating effects?
3. Before the model estimation, should the data be prepared in a particular manner?
Should the indicators be centered (by having a mean of zero), standardized (by having a mean of zero and a standard deviation of one), or manipulated in any other way?

J. Henseler
Nijmegen School of Management, Radboud University Nijmegen, P.O. Box 9108, 6500 HK
Nijmegen, The Netherlands e-mail: [e-mail]
G. Fassott
Department of Marketing, University of Kaiserslautern, Postfach 30 49,
67653 Kaiserslautern, Germany
e-mail:

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