Potential model misspecification bias: Formative indicators enhancing theory for accounting researchers

Waymond Rodgers, Andrés Guiral

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

This paper describes why and when formative factors, in combination with reflective measures, can be used in accounting research to better represent complex theoretical constructs. We argue that the exclusive use of reflective factors constrains theory development and may lead to imprecise measurement. We provide a review of 66 published research papers from Accounting, Organization and Society, The Accounting Review, Contemporary Accounting Research, Auditing: A Journal of Practice & Theory, Accounting, Auditing, & Accountability Journal, Behavioral Research in Accounting, International Journal of Accounting, Journal of Accounting and Public Policy, Management Accounting Research, Abacus, and Journal of Management Accounting Research using Structural Equation Models (SEM) from 1992 to 2008 to illustrate improvement of misspecification bias in leading accounting journals. Our findings suggest that most of the studies modeled constructs that did not include formative indicators.

Original languageEnglish
Pages (from-to)25-50
Number of pages26
JournalInternational Journal of Accounting
Volume46
Issue number1
DOIs
Publication statusPublished - 2011 Mar 1

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance

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