Belarusian Economic Research and Outreach Center

Open Seminar “Implementation of Partial Least Squares (PLS) Modeling in Economics and Business Management Research”

BEROC under the financial support of the Swedish International Development Cooperation Agency (SIDA) organized an open seminar by Dr. Pavel Andreev (University of Ottawa) “Implementation of Partial Least Squares (PLS) Modeling in Economics and Business Management Research”, which took place on August 20, 2013.

Structural equation modeling (SEM) is a powerful approach allowing modeling of constructs and relations between them, including latent variables (LVs) and observed variables (OVs). LVs represent conceptual terms used to express theoretical concepts or phenomena. OVs, also referred to as measures, indicators or items, are variables that are measured directly. Structural equation modeling (SEM) has traditionally been associated with covariance-based SEM (LISREL). However, there is an alternative approach, partial least squares SEM (PLS-SEM), which can be more attractive and more appropriate in a variety of situations. PLS-SEM has become very popular in economics and business management research. PLS-SEM is less restrictive and can be performed regardless of the kind of the data distribution or when sample sizes are reactively small or when “formative” constructs are used. PLS is especially appropriate for predictive modeling.

This open seminar provided an introduction to the PLS-SEM approach. Different examples of research that employs PLS approach were presented. One of the examples was related to the research on open innovation strategies of an organization. Another example was related to mobile payments modelling. Participants also got a hands-on, comprehensive introduction to the freeware package SmartPLS.