Partial least squares path modeling (PLS)—also known as PLS structural equation modeling (PLS-SEM)—is a variance-based structural equation modeling technique. It relies on the partial least squares algorithm, which was developed by Herman O. A. Wold.
PLS is widely applied in business and social sciences in order to predict endogenous latent variables and to estimate as well as test relationships between theoretical constructs (causal analysis). PLS can handle composite models (composite-formative measurement), common factor models (reflective measurement), and causal-formative measurement models.
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