Assessing dimensions of entrepreneurial competencies: A type ii (reflective-formative) measurement approach using pls-sem

Abstract

This paper describes the assessment of the construct "Entrepreneurial Competencies" as a second-order reflective formative construct by utilising PLS-SEM technique recommended by Hair et al. (2017). This second-order construct has been operationalized with seven context-specific dimensions including opportunity competency, conceptual competency, strategic competency, personal competency, learning competency, ethical competency, and familism. Since these dimensions do not share a common theme of their second-order, the reflective formative relationship has been established in this study. This paper suggests considering and measuring entrepreneurial competencies as a reflective-formative second-order latent variable. This is because misspecification at the level of second-order could result in drastic changes in the values of R square as well as in path coefficients' values.