A MULTIDIMENSIONAL MEASURE OF DECISION-MAKING QUALITY: EVIDENCE FROM CHINESE SECURITIES FIRMS USING PLS-SEM

This study aims to develop and validate a multidimensional, firm-level measurement model of Decision-Making Quality (DMQ) tailored to the context of Chinese securities companies, addressing the absence of industry-specific and psychometrically validated instruments in the existing literature. Drawing on decision quality theory, behavioural finance, corporate governance, and financial management literature, DMQ is conceptualised as a second-order reflective construct manifested through seven first-order dimensions. Survey data were collected from 191 respondents across nine securities firms in Zhejiang Province, China. Partial Least Squares Structural Equation Modelling (PLS-SEM) was employed to assess indicator reliability, construct reliability, convergent validity, discriminant validity, and the hierarchical measurement structure. The results demonstrate strong internal consistency and convergent validity for all first-order dimensions and acceptable reliability for the second-order DMQ construct. The higher-order model explains substantial variance across all dimensions, with large effect sizes, supporting the conceptualisation of DMQ as an integrated organisational capability. The study is limited to securities firms in one Chinese province and relies on cross-sectional survey data. Future research may test the scale in other institutional contexts and examine antecedents and outcomes of DMQ. The validated instrument provides managers and regulators with a diagnostic tool to assess and improve organisational decision-making quality beyond traditional performance metrics. This study offers the first industry-specific, multidimensional, and empirically validated measure of organisational decision-making quality for Chinese securities firms.