Reflective vs. Formative Measurement Models in Supply Chain Management Research

This research seeks to highlight a common mistake that researchers in the area of Supply Chain Management (SCM) make when selecting the measurement models for empirical research using Structural Equation Modelling. The right selection of a measurement model leads to a correct model specification and validation, and thus to truthfully research findings. We demonstrate through a simple empirical application that the selection of a correct measurement model leads to a correct model specification and completely different findings. The usage of reflective measurement models seems to be more a tradition than a real and proper choice. We suggest some useful insights on how the selection process should be carried out