Testing IB theories with meta-analytic structural equation modeling

Purpose The purpose of this paper is to illustrate how international business (IB) researchers can benefit from meta-analytic structural equation modeling (MASEM) by introducing a statistically rigorous approach (i.e. two-stage meta-analytic structural equation modeling or TSSEM) and comparing it with a conventional approach (i.e. the univariate-r approach). The illustration and comparison present a methodological overview of MASEM that will assist IB researchers in selecting an optimal method. Design/methodology/approach In this paper, the MASEM method is elaborated upon, and methodological issues are addressed, by comparing the TSSEM and the univariate-r approaches using an empirical illustration. In this illustrative example, which is based on transaction cost economics, the effects of a firm’s internal factors on its levels of commitment in an international entry strategy are examined. Findings The MASEM method can help IB researchers to test and build on IB theories by synthesizing findings in the extant literature because this method reflects the theoretical complexity of IB (e.g. intercorrelationships among factors). Comparing the two approaches of MASEM, it is found in this study that due to its statistical rigorousness TSSEM has methodological advantages in helping IB researchers test theoretical models. Originality/value This is the first study to introduce MASEM into the discipline of IB strategies. In this paper, the authors introduce an advanced research method and illustrate two ways of using it.