Essays on supplier responsiveness and buyer firm value - Nyenrode ...
Essays on supplier responsiveness and buyer firm value - Nyenrode ...
Essays on supplier responsiveness and buyer firm value - Nyenrode ...
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2.5 Measurement Model<br />
For creating our measurement model, we followed the steps used by Hair et al.<br />
(2006). We (1) specified, (2) identified, (3) estimated, (4) evaluated, <strong>and</strong> (5)<br />
respecified the model. We used AMOS versi<strong>on</strong> 17 for our analysis. The four variables<br />
in the measurement model are <strong>supplier</strong> resp<strong>on</strong>siveness, idiosyncratic relati<strong>on</strong>al risk,<br />
satisfacti<strong>on</strong>, <strong>and</strong> <strong>supplier</strong> br<strong>and</strong> <strong>value</strong>. As <strong>buyer</strong> <strong>firm</strong> <strong>value</strong> is represented by a single<br />
observed variable it is not included in the measurement model as AMOS 17 cannot<br />
h<strong>and</strong>le a latent c<strong>on</strong>struct measured by a single observed item. Although there is a<br />
st<strong>and</strong>ard procedure of fixing the regressi<strong>on</strong> weight to 1 of the latent variable for single<br />
item factor, but as it is an artificial procedure recognized by many scholars as being<br />
based <strong>on</strong> an unrealistic assumpti<strong>on</strong> (Hair et al., 2006, p. 599). Therefore, in order not<br />
to compromise our results we did not include it in the measurement model.<br />
We had a total of 48 items <strong>and</strong> we used 38 items of our survey to create our<br />
measurement model; specifically, the survey c<strong>on</strong>sisted of 12 items that measured<br />
<strong>supplier</strong> resp<strong>on</strong>siveness, 14 items that addressed IdRR, 8 items that focused <strong>on</strong> <strong>buyer</strong><br />
satisfacti<strong>on</strong>, 3 items to assess <strong>supplier</strong> br<strong>and</strong> <strong>value</strong>, <strong>and</strong> 1 item to c<strong>on</strong><strong>firm</strong> <strong>buyer</strong> <strong>firm</strong><br />
<strong>value</strong>. We employed AMOS 17 to draw covariati<strong>on</strong>s between all of the latent<br />
c<strong>on</strong>structs <strong>and</strong> observed items. We assessed our model by using several criteria,<br />
namely the magnitude of each items’ error variance estimate, item cross-loadings<br />
indicated by large modificati<strong>on</strong> indices, <strong>and</strong> significant residual covariati<strong>on</strong> (Kohli et<br />
al., 1993). Our initial model, which was entitled MOD1, was unidentifiable. Using<br />
modificati<strong>on</strong> indices, we deleted items to improve the model’s fit <strong>and</strong> achieve<br />
identificati<strong>on</strong>. Finally, we achieved an excellent model fit with 10 items following the<br />
instructi<strong>on</strong>s of AMOS modificati<strong>on</strong> indices to improve the fit statistics. The questi<strong>on</strong>s<br />
representing the 10 items are provided in Table 2.18.<br />
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