Formative versus Reflective Measurement Models: Two Applications of Formative Measurement

An organizing framework is presented which assists researches in the design and validation of formative and reflective measurement models. This framework is drawn from the extant literature and includes both theoretical and empirical considerations. The framework is then applied to two important examples, one from international business and one from marketing. Both examples concern constructs that are fundamental to theory-building in these disciplines, and constructs which most scholars have previously measured reflectively. In contrast, application of the framework to these examples suggests that a formative measurement model may be more appropriate. These results reinforce the need for all researchers to justify, both theoretically and empirically, their choice of measurement model for their constructs. Utilization of an incorrect measurement model undermines the content validity of the constructs, misrepresents the structural relationships within which these constructs are embedded, and ultimately lowers the usefulness of management theories for business researchers and practitioners. The main contribution of this paper is to question the unthinking assumption of reflective measurement seen in much of the business literature.