Categorical variable control variable smartpls
These considerations also apply for the relationship between CUSA and CUSL in the corporate reputation model example. In the prior example, we hypothesized that only the satisfaction-loyalty link is significantly influenced by income. The testing of the moderating relationship depends on whether the researcher hypothesizes whether one specific model relationship or whether all model relationships depend on the scores of the moderator. Moderating relationships are hypothesized a priori by the researcher and specifically tested. As such, moderation can (and should) be seen as a means to account for heterogeneity in the data. Thus, this relationship is not the same for all customers, but instead differs depending on their switching barriers. In other words, switching barriers serve as a moderator variable that accounts for heterogeneity in the satisfaction-loyalty link. More precisely, switching barriers have a pronounced negative effect on the satisfaction-loyalty relationship: the higher the switching barriers, the weaker the relationship between satisfaction and loyalty. For example, prior research has shown that the relationship between customer satisfaction and customer loyalty differs as a function of the customers’ switching barriers. The moderator variable (or construct) changes the strength or even the direction of a relationship between two constructs in the model. Moderation describes a situation in which the relationship between two constructs is not constant but depends on the values of a third variable, referred to as a moderator variable. As an example, the relationship between two constructs is not the same for all customers, but differs depending on their income. In other words, the nature of the relationship differs depending on the values of the third variable. When moderation is present, the strength or even the direction of a relationship between two constructs depends on a third variable.