PLS-SEM or CB-SEM: updated guidelines on which method to use

Abstract

Numerous statistical methods are available for social researchers. Therefore, knowing the appropriate technique can be a challenge. For example, when considering structural equation modelling (SEM), selecting between covariance-based (CB-SEM) and variance-based partial least squares (PLS-SEM) can be challenging. This paper applies the same theoretical measurement and structural models and dataset to conduct a direct comparison. The findings reveal that when using CB-SEM, many indicators are removed to achieve acceptable goodness-of-fit, when compared to PLS-SEM. Also, composite reliability and convergent validity were typically higher using PLS-SEM, but other metrics such as discriminant validity and beta coefficients are comparable. Finally, when comparing variance explained in the dependent variable indicators, PLS-SEM was substantially better than CB-SEM. Updated guidelines assist researchers in determining whether CB-SEM or PLS-SEM is the most appropriate method to use.