In addition to the two stage approach that you mentioned (which weĪlso described in the MISQ article), we commented on three A Primer on Partial Least Squares StructuralĮquation Modeling (PLS-SEM). Using Reflective-Formative Type Models." Long Range Planning 45Īnd you may also want to check the section on HOC in the book on "Hierarchical Latent Variable Models in PLS-SEM: Guidelines for "A Critical Look at the Use of PLS-SEM in MIS Quarterly." MISīecker, Jan-Michael, Kristina Klein, and Martin Wetzels. Ringle, Christian M., Marko Sarstedt, and Detmar W. Label Proneness: A Subtle Decay of Brand Equity." Journal of Brand "The Impact ofīrand Confusion on Sustainable Brand Satisfaction and Private Performance of Management Consulting Teams." Long Range Planning "Disentangling the Effects of TeamĬompetences, Team Adaptability, and Client Communication on the Klarner, Patricia, Marko Sarstedt, Christian M. (often called second-order models) in PLS-SEM: Some of my recentĪrticles applying (and evaluating) hierarchical component models Outer loadings determine the AVE of the HOC. Scores of the HOC based on these assigned indicators. The PLS path modeling algorithm computes the latent variable You assign all reflective indicators of the LOCs to the reflective PLS path modeling, you use an indicator re-use technique. Just use the AVE of the HOC as correctly reported by SmartPLS.