Partial Least Squares Structural Equation Modeling: Recent Advances in Banking and Finance

Description

This book pulls together robust practices in Partial Least Squares Structural Equation Modeling (PLS-SEM) from other disciplines and shows how they can be used in the area of Banking and Finance. In terms of empirical analysis techniques, Banking and Finance is a conservative discipline. As such, this book will raise awareness of the potential of PLS-SEM for application in various contexts. PLS-SEM is a non-parametric approach designed to maximize explained variance in latent constructs. Latent constructs are directly unobservable phenomena such as customer service quality and managerial competence. Explained variance refers to the extent we can predict, say, customer service quality, by examining other theoretically related latent constructs such as conduct of staff and communication skills. Examples of latent constructs at the microeconomic level include customer service quality, managerial effectiveness, perception of market leadership, etc.; macroeconomic-level latent constructs would be found in contagion of systemic risk from one financial sector to another, herd behavior among fund managers, risk tolerance in financial markets, etc. Behavioral Finance is bound to provide a wealth of opportunities for applying PLS-SEM. The book is designed to expose robust processes in application of PLS-SEM, including use of various software packages and codes, including R. PLS-SEM is already a popular tool in marketing and management information systems used to explain latent constructs. Until now, PLS-SEM has not enjoyed a wide acceptance in Banking and Finance. Based on recent research developments, this book represents the first collection of PLS-SEM applications in Banking and Finance. This book will serve as a reference book for those researchers keen on adopting PLS-SEM to explain latent constructs in Banking and Finance. Front Matter ....Pages i-x Rise of the Partial Least Squares Structural Equation Modeling: An Application in Banking (Necmi K. Avkiran)....Pages 1-29 Bank Soundness: A PLS-SEM Approach (Charmele Ayadurai, Rasol Eskandari)....Pages 31-52 The Customer Loyalty Cascade and Its Impact on Profitability in Financial Services (Anne-Kathrin Hegner-Kakar, Nicole F. Richter, Christian M. Ringle)....Pages 53-75 Corporate Reputation: The Importance of Service Quality and Relationship Investment (Lăcrămioara Radomir, Alan Wilson)....Pages 77-123 The Compliance Index Model: Mitigating Compliance Risks by Applying PLS-SEM to Measure the Perceived Effectiveness of Compliance Programs (Sebastian Rick, Ralf Jasny)....Pages 125-170 Why Should PLS-SEM Be Used Rather Than Regression? Evidence from the Capital Structure Perspective (Nur Ainna Ramli, Hengky Latan, Gilbert V. Nartea)....Pages 171-209 Management Accounting and Partial Least Squares-Structural Equation Modelling (PLS-SEM): Some Illustrative Examples (Christian Nitzl)....Pages 211-229 Back Matter ....Pages 231-239