METHODOLOGICAL AND PRACTICAL ADVANTAGES OF PLSSEM IN MANAGEMENT RESEARCH: THE CASE OF RAKIJA

Structural equation modeling (SEM) is widely applied inconsumer behavior research; however, the methodologicalchoice between covariance-based SEM (CB-SEM) andpartial least squares SEM (PLS-SEM) remains contestedin applied research contexts. This study compares theperformance of CB-SEM and PLS-SEM using an identicaltheoretical model previously employed to analyze culturalfactors influencing consumer purchasing behavior forrakija, a culturally embedded agricultural product. Surveydata were reanalyzed using SmartPLS, focusing onmeasurement model evaluation and the estimation of directand indirect structural effects. The results show that PLSSEM yields lower path coefficient estimates but higherexplained variance (R²) compared to CB-SEM, indicatingmore conservative effect estimation alongside strongerexplanatory performance. These findings suggest thatPLS-SEM represents a methodologically appropriate andpractically advantageous approach for modeling consumerbehavior in culturally specific agricultural markets.The study contributes to the applied SEM literature byproviding empirical guidance on method selection inagricultural economics research.