Testing complex models with small sample sizes: A historical overview and empirical demonstration of what Partial Least Squares (PLS) can offer differential psychology

This paper provides a theoretical overview and empirical demonstration of Partial Least Squares Path Modeling (PLS) comparing it to Structural Equation Modeling (SEM). The two data analysis techniques share historical origins but differ in terms of underlying algorithms, which gives rise to other key differences: (a) the treatment of unexplained indicator variance; (b) the specification of formative constructs; (c) the availability of model fit...