Multigroup Analysis in Partial Least Squares (PLS) Path Modeling: Alternative Methods and Empirical Results

Abstract

Purpose – Partial least squares (PLS) path modeling has become a pivotal empirical research method in international marketing. Owing to group comparisons’ important role in research on international marketing, we provide researchers with recommendations on how to conduct multigroup analyses in PLS path modeling.

Methodology/Approach – We review available multigroup analysis methods in PLS path modeling and introduce a novel confidence set approach. A characterization of each method’s strengths and limitations and a comparison of their outcomes by means of an empirical example extend the existing knowledge of multigroup analysis methods. Moreover, we provide an omnibus test of group differences (OTG), which allows testing the differences across more than two groups.

Findings – The empirical comparison results suggest that Keil et al.’s (2000) parametric approach can generally be considered more liberal in terms of rendering a certain difference significant. Conversely, the novel confidence set approach and Henseler’s (2007) approach are more conservative.

Originality/Value of Paper – This study is the first to deliver an in-depth analysis and a comparison of the available procedures with which to statistically assess differences between group-specific parameters in PLS path modeling. Moreover, we offer two important methodological extensions of existing research (i.e., the confidence set approach and OTG). This contribution is particularly valuable for international marketing researchers, as it offers recommendations regarding empirical applications and paves the way for future research studies aimed at comparing the approaches’ properties on the basis of simulated data.

JEL Classification: A00