To address the changes in the international environment and the ways international business and management are conducted, researchers often make use of a broad spectrum of theoretical explanations and borrow theories from other management disciplines to explain international research problems (e.g.
White ., 2016; Seno-Alday, 2010; Buckley and Lessard, 2005; Tsui, 2007).
Exploring is the first step in theory building – the step that establishes the initial link between the observations a researcher gathers about a phenomenon and a theory that describes it.
Thus, if the primary objective is to develop hypotheses rather than test them, the researcher identifies and further explores the relevant and dominant effects.
Building on and extending the work of Hult (2009), this paper has two objectives: First, we will analyze researchers’ justifications for their choice of analytic procedure and, particularly, whether authors are correctly applying PLS-SEM to their research problems, which is a prerequisite to contributing to theorizing in the field.
Furthermore, we will evaluate whether authors are tapping the full potential of the specific benefits attributed to PLS-SEM.While other disciplines such as family business research (Sarstedt , 2012a) show a broad and increasing use of PLS-SEM, international business research relies largely on CB-SEM.This observation is surprising, given the specifics of the international business research environment and its research agenda.Furthermore, over the past decades, the fluid and dynamic environment has led to increasingly complex research phenomena and models (e.g. Therefore, international business and marketing research requires the use of methodological approaches that are able to handle the field’s changing nature and complexity, and the resulting broad theorizing agenda (Buckley, 2002; Dunning, 2001; Sinkovics , 2005; Seno-Alday, 2010; Sullivan and Daniels, 2008).In selecting an analytical approach, researchers need to carefully consider the research objective, the underlying theoretical knowledge, and the existing empirical evidence.Fur-thermore, the authors found only limited use of PLS-SEM in the journals the authors considered relevant to the study. https://doi.org/10.1108/IMR-04-2014-0148 Download as . Following these changes, the international research agenda has also changed in the past few epochs: The focus from 1945 to the 1950s was on explaining foreign direct investments flows and then shifted toward the explanation of the existence, strategy, and organization of multinational firms, which was especially popular from the 1970s to the 1990s.The study contributes to the literature by providing researchers seeking to adopt SEM as an analytical method with practical guidelines for making better choices concerning an appropriate SEM approach. From the mid-1980s, the development of internationalization and globalization was placed on the agenda (see Buckley, 2002).One of the most powerful current research methodologies is structural equation modeling (SEM), which mainly follows one of two procedures: composite-based partial least squares SEM (PLS-SEM) (Wold, 1982; Hair , 2017) and factor-based covariance-based SEM (CB-SEM) (Jöreskog, 1978; Rigdon, 1998), which were developed as complementary SEM methods (Jöreskog and Wold, 1982).They differ greatly in their statistical methods, and have distinct goals and requirements (Hair , 2014a).In general, PLS-SEM, in contrast to CB-SEM, stresses prediction and exploration, is able to handle complex models, and simultaneously relaxes the demands on data as well as the specification of relationships (e.g. The procedure involves a variety of benefits that could be fruitful for international business and marketing researchers to exploit.For instance, it better serves predictive and exploratory purposes involved in situations of soft theory (Sosik , 2009) and is better suited to explain complex models or relationships (Fornell, 1982; Wold, 1985).