Role of structural equation modeling in scale development

Purpose The aim of the study was to highlight the role of structural equation modeling in scale development and the problems faced by researchers in developing the scale using Structural Equation Modeling (SEM). Design/methodology/approach The study thoroughly reviews and analyses the literature to discuss the role of SEM in scale development. The study was purely based on theoretical perspective. Findings The study found that the issues such as multivariate normality, multicollinearity, and methods of estimation are often overlooked by researchers in developing the scale. The study also observed that application and reporting of structural equation modeling in scale development is underdeveloped. The role of EFA and CFA in dimensionality of a construct is equivocal. Originality/value The study has covered all the issues of scale development using SEM including EFA, CFA, dimensionality, multivariate normality and Multicollinearity