Hierarchical Component Models in Partial Least Squares Structural Equation Modeling: guidelines for second-order constructs

Abstract

The Partial Least Squares Structural Equation Modeling (PLS-SEM) has been used to model hierarchical constructs in studies in the Business Administration. However, in the survey carried out in this research (in articles published in 2021 in the core Brazilian Business Administration journals classified as A2 in Qualis/Capes) and in previous studies, the inadequacy of the way of reporting how the research was carried out was identified. In addition, from the literature review, it was noticed the absence of clear guidelines, especially in relation to the way of measuring the higher order component of hierarchical constructs. Addressing this concern, this paper provide the guidance about how to specify, estimate and evaluate models of hierarchical components in PLS-SEM, more specifically for second-order constructs. Thereby, the paper explains how to evaluate the results of higher-order constructs in PLS-SEM. These guidance can support that scholars, marketing researchers need when using higher-order constructs in their studies.