SCM research methodologies: Employing Structural Equation Modeling

Supply Chain Management research very often involves an analysis of relationships among abstract concepts. For this type of analysis, Structural Equation Modeling (SEM) is a very powerful technique because it combines measurement models (confirmatory factor analysis) and structural models (regression analysis) into a simultaneous statistical test. The objective of this paper is to show how SEM can be employed in theory testing. We will also describe a process regarding its implementation and show an example of a research paper based on this methodology.