Using partial least squares in archival accounting researchan application to earnings quality measuring
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Universidad de Jaén
info
ISSN: 0210-2412
Year of publication: 2020
Volume: 49
Issue: 2
Pages: 143-170
Type: Article
More publications in: Revista española de financiación y contabilidad
Abstract
Despite the advantages of Structural Equation Modelling (SEM) over regression models that have contributed to its popularisation in several fields of research in social sciences, it has not been broadly applied in archival accounting research. In this paper, we present a guidance for the application of SEM – and, particularly, the Partial Least Squares (PLS) method – to the (arguably) most recurrent topic on empirical archival accounting research: earnings quality. We highlight several problems that arise in earnings quality measuring, indicating how PLS can help to overcome them. We also run a simulation process whose results show that PLS method outperforms the other approaches even in situations of limited information.
Funding information
Funders
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Universidad de Jaén
- UJA/2015/06/04
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Universidad de JaJaénn
- FPI Acción 16 UJA
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