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Tanachart Raoprasert & Sardar M.N. Islam

In: The SAGE Dictionary of Quantitative Management Research

Chapter 91: Structural Equation Modelling in Business Management

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Structural Equation Modelling in Business Management
Structural equation modelling in business management
Introduction

Structural equation modelling (SEM) is a popular method of analysis that allows for examining various models which could explain data structures (Byrne, 2001) and relationships in management and organizational behaviour. It is an analytical method that improves and supersedes other methods such as multiple and multivariate regression, or recursive path analysis (Holmes-Smith, 2000) in management research. SEM can make a distinction between latent and observed variables, can estimate the nature of measurement error associated with the observed variables, and permits unequal weightings for the multiple indicators of a latent construct (Holmes-Smith, 2000) in a management model. Moreover, SEM can examine more than one relationship within the model at a time (Hair et al., 2003): i.e. ...

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