Theory Development in Information Systems Research Using Structural Equation Modeling: Evaluation and Recommendations

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Abstract

Structural equation modeling (SEM) techniques have significant potential for assessing and modifying theoretical models. There have been 171 applications of SEM in IS research, published in major journals, most of which have been after 1994. Despite SEM’s surging popularity in the IS field, it remains a complex tool that is often mechanically used but difficult to effectively apply. The purpose of this study is to review previous applications of SEM in IS research and to recommend guidelines to enhance the use of SEM to facilitate theory development. The authors review and evaluate SEM applications, both component-based (e.g., PLS) and covariance-based (e.g., LISREL), according to prescribed criteria. Areas of improvement are suggested which can assist application of this powerful technique in IS theory development.