Partial least squares structural equation modeling (PLS-SEM): A useful tool for family business researchers.
PLS-SEM is a versatile method for estimating structural equation models.
We provide a non-technical step-by-step approach to concepts and issues of PLS-SEM.
We identify how and why PLS-SEM may be useful for family business researchers.
We provide a real-world family business PLS-SEM research example.
The extensive bibliography is a support to current and future PLS-SEM users.
Structural equation modeling (SEM) has become a mainstream method in many fields of business research, but its use in family business research remains in its infancy. This lag in SEM’s application holds especially true for partial least squares SEM (PLS-SEM), an alternative to covariance-based SEM, which provides researchers with more flexibility in terms of data requirements, model complexity and relationship specification. This article draws attention to PLS-SEM as an opportunity to advance the development and testing of theory in family business research by providing a non-technical introduction into the basic concepts and issues of PLS-SEM, bearing the needs of potential users in mind. To this end, a systematic procedure for PLS-SEM results evaluation is presented and applied to an annotated example. The article also illustrates the analysis of mediating effects, which researchers are increasingly testing in their models.