Using partial aggregation in complex structural equation modeling (SEM): application to cooperative product innovation

Where the research task involves collecting quantitative strategic data from senior management, low response rates and corresponding small sample sizes tend to be the norm. When structural equation modelling (SEM) is proposed, the challenge of undertaking sound research can be further compounded by the need to test a complex research model. A simple statistical technique which can help in this case is data reduction through partial aggregation of measurement models within the structural model. This paper provides a brief review of literature on aggregation and composites – the foundation for aggregation. Then it illustrates the use of partial aggregation in SEM for a six-factor model of cooperative product innovation, including three distinct factors characterising interorganisational relationships (IORs) in relation to four different stakeholder groups. The outcomes of this approach are a set of well-fitting SEM measurement models and structural models at an overall multi-stakeholder level and a stakeholder-specific level.