Moderation Analysis

AbstractWhen moderation is present, the strength and even the direction of a relationship between two constructs depend on a third construct (i.e., the moderator). In other words, the strength of the relationship between two constructs changes as the levels of the moderator construct change. As an example, the relationship between customer satisfaction and customer loyalty may not be the same for all customers but may differ depending on moderators such as income, age, or switching costs. As such, moderation can (and should) be viewed as a means of accounting for heterogeneity in the data. In this chapter, we explain the moderation analysis procedure first. We then illustrate its application in PLS-SEM using the SEMinR package and the corporate reputation model example.