Assignment

Submitted to: Dr. Fawad Latif

Submitted by: Mazhar-ul-haq
Reg# fa20-rms-004
Measurement Model

As part of measurement model evaluation, two items (OC4, OL2) were removed from the analysis
because of low factor loadings (<0.700) (Gefen and Straub, 2005). To test the reliability of the
constructs, the study used Cronbach’s alpha and composite reliability (CR). All the CRs were higher than
the recommended value of 0.700 (Wasco and Faraj,2005). Cronbach’s alpha of each construct exceeded
the 0.700 threshold. Convergent validity was acceptable because the average variance extracted (AVE)
was over 0.500. The results for reliability and validity along with the factor loadings for the items are
presented in (Table 1). Discriminant validity was assessed by Fornell-Larcker criterion, the table shows
the square root of AVE for the construct was greater the inter-construct correlation (see Table2).
Discriminant validity was also assessed by heterotrait-monotrait ratio of correlations (Henseler et
al.,2015), with values below the threshold of 0.900. Hence discriminant validity was established (see
Table 3).

Table1. Loadings, Reliability and Validity

Loadings Cronbach’s alpha Composite Reliability AVE

IM1 0.786 0.957 0.962 0.642
IM10 0.759
IM11 0.809
IM12 0.809
IM14 0.751
IM15 0.817
IM2 0.892
IM3 0.869
IM4 0.852
IM5 0.798
IM6 0.755
IM7 0.764
IM8 0.828
IM9 0.709
OC1 0.749 0.902 0.923 0.631
OC2 0.851
OC3 0.76
OC5 0.862
OC6 0.719
OC7 0.794
OC8 0.812
 OL1 0.704 0.925 0.94 0.692
OL3 0.789
OL4 0.855
OL5 0.879
OL6 0.864
OL7 0.892
OL8 0.825
OP1 0.867 0.907 0.931 0.729
OP2 0.893
OP3 0.834
OP4 0.861
OP5 0.81
Table 2. Fornell-Larcker criterion.

IM OC OL OP
IM 0.801
OC 0.584 0.794
OL 0.656 0.617 0.832
OP 0.611 0.624 0.601 0.854
Note: Values in italic represent square root of AVE

Table 3. HTMT ratio.

IM OC OL OP
IM
OC 0.619
OL 0.691 0.674
OP 0.652 0.682 0.65

Structural Model

The structural model reflects the paths hypothesized in the research framework. A structural model is
assessed based on the R2, Q2 and significance of paths. The goodness of the model is determined by the
strength of each structural path determined by R2 value for the dependent variable (Briones Pefielver et
le.,2018) the value for R2 should be equal to or over 0.1 (Falk & Miller 1992). The result in Table 4 shows
that all values of R2 are over 0.1. Hence the predictive capability is established. Further Q2 establishes the
predictive relevance of the endogenous constructs. A Q2 greater than 0 shows that the model has
predictive relevance. The results show that there is significance in the prediction of the constructs (see
Table 4). Furthermore, the model fit was assessed using SRMR. The value of the SRMR was 0.070, this is
below the required value of .10, indicating acceptable model fit (Haier et al.,2016). Furthermore,
assessment of the goodness of fit, Hypothesis were tested to ascertain the significance of the
relationship. H1 evaluates whether IM has a significant impact on OP (β =.277, t=2.255, p=.025). Hence
H1 was supported. H2 evaluates whether IM has a significant impact on OC. (β =.584, t=8.007, p=.000).
Hence H2 was supported. H3 evaluates whether IM has a significant impact on OL. (β =.656, t=8.423,
p=.000). Hence H3 was supported. H4 evaluates whether OC has a significant impact on OP. (β =.330,
t=2.353, p=.019). Hence H4 was supported. H5 evaluates whether OL has a significant impact on OP. (β
=.216, t=1.947, p=.052). Hence H5 was not supported. Hypothesis testing results are summarized in
(Table 4)

Table 4 R2, Q2, Hypothesis results

β Standard Deviation (STDEV) T Statistics (|O/STDEV|) P Values

IM -> OP 0.277 0.123 2.255 0.025
IM -> OC 0.584 0.073 8.007 0.000
IM -> OL 0.656 0.078 8.423 0.000
OC -> OP 0.330 0.140 2.353 0.019
OL -> OP 0.216 0.111 1.947 0.052
R2 Q2
OC 0.341 0.202
OL 0.430 0.285
OP 0.505 0.339
SRMR
Saturated Model 0.070
Estimated Model 0.084