Structural Equation Modeling: A Practical Introduction

Structural equation modeling (SEM) is a popular statistical technique that has become an essential tool for business academics and practitioners. The technique is particularly well suited for evaluating the relationships among any number of observed and latent variables. Thus, typical applications for SEMs are model and theory testing, and scale development. The purpose of this article is to introduce the technique and to explain its use in practical terms that do not require a strong statistical background. Two previous Journal of African Business articles are used to demonstrate SEM applications, and the article concludes with a brief introduction to SEM software packages.