Conditional probabilistic analyses with WarpPLS

If an analysis suggests that two variables are causally linked, yielding a path coefficient of 0.25 for example, this essentially means in probabilistic terms that an increase in the predictor variable leads to an increase in the conditional probability that the criterion variable will be above a certain value. Yet, conditional probabilities cannot be directly estimated based on path coefficients; and those probabilities may be of interest to both researchers and practitioners.

By using the “Explore conditional probabilistic queries” menu option, WarpPLS users can estimate conditional probabilities via queries including combinations of latent variables, unstandardized indicators, standardized indicators, relational operators (e.g., > and <=), and logical operators (e.g., & and |). The article below provides an illustration of the use of this software feature in the context of a study of technology, innovation, and SMEs' export intensity.

Haddoud, M. Y., Kock, N., Onjewu, A. K. E., Jafari-Sadeghi, V., & Jones, P. (forthcoming). Technology, innovation and SMEs' export intensity: Evidence from Morocco. Technological Forecasting and Social Change. (Online availability details: Volume 191, June 2023.)

Link to full-text access from the publisher:

https://www.sciencedirect.com/science/article/abs/pii/S0040162523001609

Abstract:

This study seeks to understand the scarcely examined relationships between SMEs' foreign technology licensing, R&D expenditure, innovation and export intensity. Espousing an integrated open innovation and self-selection paradigm, observations of 446 Moroccan SMEs are analysed through structural equation modelling. The definitive path analysis showed that foreign technology licensing and R&D expenditure distinctively affect innovation and, in turn, innovation increases export intensity. In further insights, to illustrate how the distribution of these inputs enhances internationalisation, a probabilistic analysis shows that foreign technology licensing, R&D expenditure and innovation will incrementally stimulate export intensity by >71 %. The permutations of these variables in the fresh setting of Morocco summon scholars' empirical attention at the same time as policymakers' consideration.

(Many thanks to my co-authors, particularly Dr. Mohamed Haddoud, and to the review panel, for all of their work!)

Best regards to all!