Formative versus reflective measurement models: Two applications of formative measurement

This paper presents a framework that helps researchers to design and validate both formative and reflective measurement models. The framework draws from the existing literature and includes both theoretical and empirical considerations. Two important examples, one from international business and one from marketing, illustrate the use of the framework. Both examples concern constructs that are fundamental to theory-building in these disciplines, and constructs that most scholars measure reflectively. In contrast, applying the framework suggests that a formative measurement model may be more appropriate. These results reinforce the need for all researchers to justify, both theoretically and empirically, their choice of measurement model. Use of an incorrect measurement model undermines the content validity of constructs, misrepresents the structural relationships between them, and ultimately lowers the usefulness of management theories for business researchers and practitioners. The main contribution of this paper is to question the unthinking assumption of reflective measurement seen in much of the business literature.