Abstract
This research article presents a comparative analysis of three major methods of mediation
analysis i.e., Baron and Kenny, Sobel, Hayes indirect effect with bootstrap using PROCESS
macro and Structural Equation Modeling (SEM). It discusses common issues associated with
mediation analysis and common mistakes committed in the selection and application of method
and in the interpretation of results. In this article we have developed and tested a variety of
models including simple mediation, parallel mediation, and serial/sequential mediation models.
We have used a research model drawn from management field which includes two independent
variables (i.e., organization justice and corporate social responsibility), two dependent variables
(i.e., employee wellbeing and organization performance) and two mediating variables (i.e.,
organization trust and organization culture). The article illustrates that bootstrapping has an
advantage over Baron and Kenny method or with Sobel test. Besides, it has high statistical
power and better control on type-I error. It produces better results even when data lacks the
property of normal distribution. The article has many practical implications. More particularly
for management researchers, it provides an in-depth understanding of how to correctly conduct
mediation analysis.
Ghulam Dastgeer, Atiq ur Rehman, Muhammad Ali Asghar. (2020) Selection and use of mediation testing methods; application in management sciences, Business & Economic Review, Volume 12, Issue 3.
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