Tourism sector, Travel agencies, and Transport

Suppliers: Comparison of Different Estimators in

the Structural Equation Modeling
Nataa Kovai1, Darja TOPOLEK2 and Dejan DRAGAN2
1

University of Rijeka / Faculty of Tourism and Hospitality Management, Opatija, Croatia

2University of Maribor/Faculty of Logistics, Celje, Slovenia

Abstract The paper addresses the effect of external integration (EI) with transport suppliers on the efficiency
of travel agencies in the tourism sector supply chains. The main aim is the comparison of different estimation
methods used in the structural equation modeling (SEM), applied to discover possible relationships between EIs and efficiencies. The latter are calculated by the means of data envelopment analysis (DEA). While
designing the structural equation model, the exploratory and confirmatory factor analyses are also used as
preliminary statistical procedures. For the estimation of parameters of SEM model, three different methods are
explained, analyzed and compared: maximum likelihood (ML) method, Bayesian Markov Chain Monte Carlo
(BMCMC) method, and unweighted least squares (ULS) method. The study reveals that all estimation methods
calculate comparable estimated parameters. The results also give an evidence of good model fit
performance. Besides, the research confirms that the amplified external integration with transport providers
leads to increased efficiency of travel agencies, which might be a very interesting finding for the operational
management.
Key wordsTourism Sector, Structural Equation Modeling, Estimation methods, External Integration, Efficiency
of Travel Agencies.

I. INTRODUCTION
Structural equation modeling (SEM) is a family of advanced statistical tools for modeling the
relationships between different types of variables. It can deal with an enormous number of
exogenous and endogenous variables, as well as with unobserved latent variables (factors constructs) expressed by linear combinations of the measured indicator (manifest - item) variables
[1, 2]. Since some of the variables involved in SEM are latent, structural equation modeling is
sometimes also called as latent variable modeling. One of the primary goals of SEM is an estimation
of causal effects between addressed variables. For this reason, SEM modeling has been also
referred as causal path modeling [1]. The latter represents the extension of multiple regression
analysis and enables efficient background for modeling the complex causal relationships among
the multiple variables [3].
Another name for SEM modeling is covariance structures modeling, since the investigation of
particular covariance and correlation patterns among the treated variables is engaged here and
the covariance analysis methods are used for SEM estimation [1, 2, 3]. Different names for SEM
modeling are all consistent with Bollens definition from 1989, who proposed that SEM be based on
three main analytical methodologies: (1) path analysis, (2) latent variable analysis and modeling,
and (3) covariance estimation methods [2, 4].
In statistical manner, SEM can be treated as an integration, generalization, and extension of
familiar general linear statistical models such as multiple regression modeling, analysis of variance
(ANOVA), and factor analysis [1]. Due to a broad spectrum of covariance analysis methods, which
can provide accurate estimates, SEM can be conducted for different types of data, such as
continuous, ordinal, longitudinal, cross-sectional, and so [1, 2, 3, 5].
Since SEM is a confirmatory type of modeling, we can simplistically say that it combines the
multiple regression analysis, simultaneous equations models, and confirmatory factor analysis (CFA)
into the comprehensive statistical modeling framework [1, 2, 3]. SEM model comprises two main
submodels, measurement and structural submodel, which can be estimated simultaneously [2]. The
latter means that the relations between observed indicators and latent variables (measurement

part) and the causal relations between the latent variables among themselves (structural part) can
be evaluated in a single model [1, 3]. The only condition for simultaneous estimation of both
submodels is the ensuring of the full-information estimation methods [1, 3].
Applications of SEM that concentrate exclusively on the relationships between latent variables
and their observed indicators are usually referred to as CFA analysis [1]. In this case, the SEM model
comprises only one part, that is measurement submodel. Contrary to exploratory factor analysis
(EFA), the CFA investigates how well the measured indicators characterize the unobserved latent
variables. For this purpose, individual statistical tests are applied while the factor structures are
hypothesized in advance and then verified empirically. Although EFA does not test a certain
theory, but only derive particular factor structure from the data, it can be a still useful preliminary
guideline for subsequent CFA. This way, the nature of the latent variables can be initially inspected,
and a preliminary insight of the relationships between factors and their measured indicators can be
initially provided [3, 6].
One of the main aims of SEM modeling is to explore whether the hypothesized theoretical model
consistently reflects the measured data [1]. For this purpose, the different Goodness-of-fit (GOF)
indices are used to verify if a model defined by the researcher is consistent with variancecovariance patterns in the data [2]. By other words, this means that the GOF indices support us to
identify the level of plausibility and adequacy of assumed relationships between the variables
addressed in the SEM model [1, 3].
According to [1, 2], the most frequently used estimation methods in SEM modeling are:
maximum likelihood (ML) method, generalized least squares (GLS) method, unweighted least
squares (ULS) method, weighted least squares (WLS) methods, also called asymptotically
distribution-free (ADF) methods, and Bayesian Markov Chain Monte Carlo (BMCMC) methods. All
mentioned estimators have their advantages and weaknesses, such as issues about normality
violations, appropriateness of sample size, and so.
The ML estimator is probably the most popular among researchers because it is justly robust
against violations of normality conditions [2]. Its solution maximizes the probability that the observed
covariances belong to the population, which has its variances and covariances produced by the
process implied by the model, where a multivariate normal distribution is assumed [2].
Surprisingly, despite the extensive use of SEM modeling in many areas, a relatively little research
has been reported in the scholarly literature on comparison of achieved results with several
different estimation methods applied to the same real cases [7]. This is particularly true for the
tourism sector and tourism supply chains, which are addressed in this study. More precisely, the
paper addresses an investigation of possible impacts of external integration (EI) with transport
providers on the efficiency (EFF) of travel agencies. For this purpose, the SEM model is constructed
on the basis of questionnaires data collected in the survey, which was proceeded among the
chosen Croatian agencies.
The main aim of the SEM model is to identify how the differences in the integration level
regarding the different kinds of suppliers (water, air, bus, and rail) influence on the efficiency of the
agencies. From existing literature, it is evident that practically none of similar research has been
done in the field. But as noted in some previous studies [8-14], the amplified integration of members
in the tourism supply chains definitely leads to improved performance and bigger quality of
services. Since there is a quite big gap detected in the existing literature about similar kind of
research as it was ours, we believe that the findings of this study might serve as a major contribution
of this paper.
The efficiencies of the travel agencies are calculated by the means of data envelopment
analysis (DEA). During the construction of SEM model, the EFA and CFA analyses are also employed
as preliminary stages. Namely, it is recommended to conduct the CFA alone before the estimation
of the entire SEM model since its measurement part must be firstly separately statistically evaluated.
The reason is to verify independently if hypothesized factor model, reflected in its indicators,
adequately fits the real data.
For the estimation of parameters of given SEM model, three different estimators, ML estimator,
BMCMC estimator, and ULS estimator, are applied. For these estimators, their characteristics and
different properties are shortly stressed. Afterward, the comparison of achieved estimation results by
these estimators is performed and discussed.
When a SEM model is finally estimated and appropriately evaluated, it can be used to identify
the relationships between the measured item indicators and the latent factors EI-s. Also, the causal
directional paths from these factors to the latent factor EFF can be investigated. While doing these
calculations, the program package IBM SPSS V21 and its extension AMOS were applied.

II. THE MAIN STEPS OF SEM MODELING

The main steps of SEM modeling procedure are depicted in Fig. 1 [3, 10, 15]. In the first step, the
data (usually gained by the means of the survey) are collected, and all statistical measures are
selected. Herein, possible assumptions are also applied, such as those about the sample size,
normality level of the data, the outliers, and so. In the second step, the suitable model must be
specified, and possible causal paths between the variables must be defined according to the
certain theory. Afterward, identification and estimation of the model are the next steps of the
modeling process.
While proceeding model identification, the caution must be taken about so-called overidentification [1, 15]. In the process of model estimation, proper estimation method must be chosen
due to satisfactory performance of GOF indices. The model verification follows in the SEM modeling
development. At this step, the model fit quality is evaluated via the calculation of different fit
indices. If they indicate a poor model performance, the model must be adjusted and re-specified.
Otherwise, the constructed model is prepared for suitable interpretation and the report of
computed results.

Figure 1. The basic steps of SEM modeling process

III. ESTIMATION METHODS IN SEM MODELING PROCESS
Model estimation is one of the most important tasks of any SEM application. The quality of
estimated parameters, their accompanying standard error estimates, and model fit statistics rely on
the selection of appropriate estimation methods [1]. As generally in statistics, necessary properties
of estimators comprise asymptotic unbiasedness, consistency, and efficiency.
The basic components of data for SEM modeling and analyses are sample variances and
covariances of measured variables [1]. When a hypothesized SEM model is set, individual measured
variables can be expressed as a function of unknown parameters (path coefficients or factor
loadings) and other measured or unobserved variables in the model [1]. These functions refer to
structural relations among the variables and are also called as "structural equations". From these
equations, variances and covariances of measured variables can be expressed in relationship to
unknown parameters in the model (i.e. causal path weights, factor loadings, and variances and
covariances of latent factors). Since these variances and covariances are specific for a given
model (model-specific), they are called model-implied variances and covariances [1].

Afterward, during the estimation process, the main issue is to find such model parameters that
the model-implied variances and covariances are as close as possible to the observed sample
variances and covariances [2].
Fig. 2 shows most frequently used estimation methods, used in SEM modeling process. All the
details about those methods can be investigated in the scholarly literature [1, 3, 6, 15]. In the
sequel, the main properties of corresponding estimators will be explained.

Figure 2. SEM estimation methods

ML estimator is most commonly used estimator in SEM modeling. In general, it requires certain
statistical assumptions about the normality and provides quite accurate estimates in the case of
continuous variables with normal distribution [15]. The possible non-normality of the data is usually
detected with the computation of skewness index (SI) and kurtosis index (KI) of the measured
variables. If SI and KI indices provide the evidence of at least approximate normality, then the
application of ML estimator is not problematic. But in the case of ordinal data, the decision about
the suitability of this estimator can become more complex. In general, most of the researchers
agree that the ML estimator can be applied in the case of ordinal variables, if they have at least 5
categories and do not significantly depart from the normality conditions [3, 5, 15].
For the ML estimator, the following conditions must be (at least approximately) fulfilled [1, 3]:
the normality of univariate distributions of the addressed variables;
the bivariate normality of the joint distribution of any pair of addressed variables;
the homoscedasticity and linearity of bivariate scatterplots.
This estimator associates ML method with the observed covariance matrix. During the ML
estimation procedure, the parameters, which minimize the difference between data sample
covariance matrix and model implied covariance matrix, are estimated. In the case of multivariate
normality of observed variables and correct specification of the model, the ML estimator is
characterized as asymptotically consistent, efficient, unbiased, and normally distributed [1]. Then
the model fit statistic is chi-square

asymptotically distributed, which enables us to apply an

inspection of the overall fit of the model to the data by the means of test. And even more,
when this case happens, the asymptotic variance-covariance matrix of the ML estimator also
provides the calculation of standard error estimates, which enables us to conduct the significance
tests [1]. On the contrary, when the measured data are substantially non-normal, the calculated
2

parameters are still relatively unbiased while the model chi-square

statistic can be
overestimated, and standard error estimates can be deflated.
As an alternative to the ML estimator, many other estimators have been designed (see Fig. 2).
They possess different statistical properties and various estimation mechanisms, which are adopted
for the computation of estimated parameters. Also, they can have different GOF indices and
2

different assumptions about the observed variables. Some of them can effectively face with the
non-normal character of the variables while the others are even specially developed for the
categorical variables. The main properties of these estimators can be shortly stressed as follows.
GLS estimator minimizes the so-called weighted residual function by the means of different
iterative algorithms. This estimator assumes the multivariate normality of the data with no excessive
kurtosis. It is also characterized as asymptotically unbiased, consistent, efficient, and normally
distributed full-information estimator.
ULS estimator does not have any assumptions about the distribution of measured variables. In
general, it is less efficient than maximum likelihood estimator. As it turns out, it has one specific
requirement, which demands that all indicators must be observed on the same scale.
WLS (ADF) estimators are also insensitive to the distributional properties of the measured
variables. When asymptotic covariance matrix is applied here, these estimators also involve forthorder moments around the mean, which are additionally included in estimation besides the second
order moments. For the adequate estimation, these methods rigorously require the large sample
size. Since the full-weight matrix must be inverted here, they are computationally very expensive
estimators.
DWLS estimators are very useful in the case of significantly non-normal ordinal variables when we
are also dealing with so-called polychoric correlations between the categorical variables. To avoid
the computational wastefulness of WLS estimators, DWLS estimators might usually be a better
choice [1].
WLSWM and WLSMV estimators are extraordinary estimators, which were specially designed for
2
the variables with categorical nature. Herein, the corrected test statistics is also available [6].
As it turns out, among the estimation methods, based on polychoric correlations, the WLSMV
method has been indicated to yields better results than the WLS and WLSM estimator in type I error
control [1].
BMCMC estimators are very appropriate for the noticeably non-normal categorical variables.
These estimators do not require any assumption about the asymptotic normality of the estimated
parameters. The reason is that the Bayesian credibility intervals only rely on percentiles of the
posterior distribution, not limited to any fixed form [1, 3].
The BMCMC estimators are modern and up-to-date alternative to other SEM estimation methods
[1, 5, 16]. They use the Markov Chain Monte Carlo (MCMC) procedures for gradual reduction of the
uncertainty in the parameter estimates [5]. Since these methods are insensitive to the normality
issues, they can be competently used to examine the correctness of results of other, more classical
SEM estimation methods, particularly in the case of ordinal and slightly non-normal data [5].
Besides, it was reported in several studies that the BMCMC estimators can provide more
accurate estimates for smaller sample sizes than some other estimation methods, such as, for
example, the ML method [17, 18]. In general, the main property of these methods is the capability
of combining the prior knowledge about the parameters with the fact that the modeling process
does not depend on the asymptotic theoretical baseline [19]. This property becomes particularly
essential in the case of small sample size and ordinal or markedly non-normal data.
The main philosophy of Bayesian estimation is the fact that every parameter can be addressed
as a random variable with associated probability distribution. Then the assumed prior probability
distribution can be combined with the empirical information carried in the sample data by the
means of the Bayes' theorem, which gives us the posterior distribution [16].
The uncertainty in the estimated parameters is afterward progressively reduced by the
generation of new data, which are produced from the original sample by using the MCMC
procedure [5, 16]. The latter picks up the repeated samples from the given dataset and generates
a big number of the estimates for each model parameter. This way, posterior probabilities of those
parameters can be also derived, and the mean values of posterior distributions can be used for the
parameter estimates [16].
Since the maximum likelihood estimator provides quite a big number of GOF indices, it is usually
desired to use it in the estimation process. As Olsson and his colleagues suggest [20], it is convenient
to employ several estimators while doing estimation (for example ML, WLS, and GLS estimators,
etc.), and then investigate whether all of them provide similar estimation results. If so, we have an
additional confirmation that the model structure is correctly identified, as well as the parameter
estimates accurate enough. Such logic was for example used in work [21], where authors applied
two estimators, ML estimator, and ULS estimator. Similarly, following the suggestions of Byrne [5],
researchers in study [22] compared the results of ML and BMCMC estimators, where Bayesian
method was used to reaffirm the results of ML estimator.

In our case, we have used three estimators, ML estimator, ULS estimator, and BMCMC estimator,
by which it was possible to compare the calculated results for parameter estimates of the SEM
model.
IV. CONCEPTUAL FRAMEWORK, HYPOTHESIZED MODEL, AND SURVEY
A conceptual framework of the hypothesized model is depicted in Fig. 3. Data collection was
carried out by a conduction of a survey among 671 travel agencies, located alongside the NorthEast coast in the Adriatic Sea. The questionnaire was divided into two parts. The first one was
interrelated with the external integration indicators for each type of transport supplier. It consisted
of 11 ordinal variables, as follows: Wi QiW , i 1,...,11 (water suppliers), Ai Qi A , i 1,...,11 (air
suppliers), Bi Qi B , i 1,...,11

(bus suppliers), and Ri Qi R , i 1,...,11

(rail suppliers). These

measures were needed to evaluate the behavioral magnitudes of external integration with
transport suppliers and encompassed the following crucial EI dimensions: interaction, consultation,
and collaboration [10].
Creation of ordinal variables Wi , Ai , Bi , Ri was based on interviewing the managers of travel
agencies. They were asked to estimate the level of relationships with transport suppliers on the
ordinal scale from 1 (zero cooperation) to 5 (total cooperation). The structure of survey questions of
the first part of the questionnaire is shown in Fig. 3.
The second part of the questionnaire consisted of five indicators. They can be called as an
agencies inner variables, denoted by: xi , i 1, 2,3, y j , j 1, 2 , where xi refer to input variables,
while y j refer to output variables. The meaning of these variables can be seen in Fig. 3. These
variables were needed to calculate the efficiencies of the travel agencies, similarly as it was
reported in study [23].
From Fig. 3 can be seen that we conducted four main hypotheses Hi , i 1, 2,3, 4 , which
indicate that external integrations with transport suppliers, denoted by EI i , i 1, 2,3, 4 , do have a
certain influence on the efficiency (EFF) of the agencies. Additionally, six sub-hypotheses have
been applied, by which it was supposed that external integrations are interrelated among
themselves as well (their connections are not shown in Fig. 3).

Figure 3. Conceptual framework of hypothesized model

V. SEM MODELING PROCESS FOR THE CASE OF AGENCIES

Fig. 4 depicts the main methodologies used in the SEM modeling process. In the first stage, the
DEA analysis was applied to estimate the efficiencies on the basis of agencies inner variables. This
method is based on linear programming principles and is designed for measuring the efficiency of
given decision-making unit (DMU) [23, 24]. Herein, the most efficient DMU (i.e. company or some
other organization) represents the "frontier", with which the relative performance of all other DMUs
in the sample must be compared. Then any deviation from the frontier is reflected as inefficiency
[24].
In the next stage of the modeling process, the EFA analysis was employed. It investigated the
nature of external integration based latent factors EI i , i 1, 2,3, 4 , assessed via the observation of
measured indicators Wi , Ai , Bi , Ri . Afterward, the CFA analysis assisted us to evaluate statistically
how well the measured indicators represent the corresponding factors. This way, the confirmation
of hypothesized factor structure was executed by the means of certain statistic tests and
calculation of GOF indices. So, the recommendations of many authors [1, 6, 15, 16] were taken into
the consideration, who claim that it is needed to apply the CFA individually before the estimation
of the overall SEM model. This enabled us to carry out the statistical evaluation of measurement
theory completely independently to be completely convinced of the adequacy of the
measurement part of SEM model.
After the completion of CFA analysis, the SEM modeling procedure was the final stage of our
model design process. At this stage, the structural part of the SEM model was also constructed, and
both sub-models, measurement and structural, were linked together and transformed into the
overall SEM model. Naturally, before the total completion of SEM modeling process, the adequate
validation of the model has been also processed by the means of GOF indices. The final SEM model
revealed the causal path relations between the external integrations EI i , i 1, 2,3, 4 and the
efficiency EFF of the agencies, as well as the interrelations among EIs themselves. The weights of all
paths and interrelations were also estimated in this process by the means of ML, ULS, and BMCMC
estimator.

Figure 4. The main methodologies used in the SEM modeling process for the case of agencies

VI.

PRACTICAL NUMERICAL RESULTS

A. Statistical properties of the data

It turned out that only 61 travel agencies were prepared to cooperate fully with the survey
since the others were unresponsive to reveal enough information about their economic activities.
The conditions for the normality of collected data were not severely violated, but only slightly, since
the range of SI was 1.6, 2.69 , while the range of KI was 1.516, 6.49 . According to several
authors [25-30], these ranges are acceptable for further analysis and do not represent any serious
non-normality problem, even in the case of relatively small sample size.
B. Exploratory factor analysis
Correctness of conducting the factor analysis was inspected by the execution of two tests,
Bartletts test of sphericity (BTS) and the Kaiser-Meyer-Olkin (KMO) test [1, 6, 15]. The value for BTS
value was highly significant ( 2 1998.664 with df 300 and p 0.001 ), while the KMO value was
0.763 0.5 . According to recommendations of some authors [31, 32], the calculated KMO, and BTS
values confirmed that the factor analysis can be consistently applied for the further research.
For the extraction of factors and estimation of their loadings, the principle axis factoring (PAF)
algorithm was employed. Since the so-called communalities hi2 [3, 6] of some indicators were not
acceptable, and the cross-loadings were quite significant, 19 ill-fitting indicators were excluded
from the further analysis. Afterward, the factors extraction was conducted again on the basis of
PAF algorithm and PROMAX with Kaiser Normalization rotation method [5].
When the rotation was completed, the significant cross-loadings were completely eliminated
while the communalities of retained indicators became sufficiently large, which means the range:
( 0.574 hi2 0.891 ). Also, the final indicators loadings ij on addressed factors reached the
adequate value ( ij 0.689 ), as it is recommended in the literature [6, 33].
Table 1 shows the derived Cronbach alpha coefficients (CAC), eigenvalues, the percent of the
variance, and the cumulative variance percent of the extracted factors. Naturally, these results are
presented for the case of retained indicators. CAC values are all bigger than 0.7, as suggested by
Hair and his colleagues [6]. According to these authors, the derived results presented in this section
had satisfied all the crucial requirements for the convergent and discriminant validity, as well as the
reliability and internal consistency. Additionally it turned out that according to our expectations,
the different types of transport suppliers indicators were significantly loaded on their own factors.
Or, by other words, the water transport indicators Wi QiW , i 1,...,11 were significantly loaded on
water factor EIW , the air transport indicators Ai Qi A , i 1,...,11 were significantly loaded on air
factor EI A , and so.
Table 1. The derived CAC coefficients, eigenvalues, the percent of the variance, and the
cumulative variance percent of the extracted factors.
Factor
Measure

EI W

EI A

EI B

EI R

Cronbach Alpha

0,960

0.972

0.921

0.947

Eigenvalues

9,951

5.495

2.725

2.346

% of Variance

39.805

21.980

10.902

9.383

Cumulative %

39.805

61.785

72.687

82.069

C. Confirmatory factor analysis

In CFA, the indicators were firstly allocated to the corresponding factors according to the
preliminary recommended guidelines of the EFA analysis, and the estimation of measurement submodel was executed by the means of all three estimators, ML, BMCMC, and ULS. Since calculated
GOF indices indicated the un-adequate results, 6 more ill-fitting indicators have been additionally
excluded from the further analysis. Afterward, the estimation was repeated again, and GOF indices
have become adequate. The estimation results have implied that all three estimators achieved
similar results for estimated parameters.
After the successful estimation and GOF indices based evaluation, the process of further
confirmation of our measurement theory was the next step of CFA analysis. This means that the
overall measurement sub-model was assessed for its validity and reliability. In this context, the
convergent and discriminant validities are particularly important. The convergent validity
encompasses the properly high values of factor loadings, the adequate composite reliability (CR),
and the appropriate average variance extracted (AVE) [6]. According to Hair et al. [6], the
threshold of CR is 0.7 while the threshold for AVE is 0.5 .
The discriminant validity demands that the AVE of each factor should be larger than the
squared correlation CORR 2 between this factor and any other factor, which means:

AVE CORR [6, 34].

In our case, the conditions about convergent and discriminant validities have been confirmed
for all three estimators. For example, when ML estimator was used, the range of estimated
standardized factor loadings was: 0.741 ij 0.984 , which indicates the appropriate
convergent validity. Standardized factor loadings have taken similarly high range in the case of
BMCMC and ULS estimators. The convergent validity was also confirmed through the calculation of
CR and AVE values. Table 2 shows results for CR and AVE regarding each addressed factor when
the ML estimation was applied. Obviously, the calculated CR values are all bigger than 0.7 while
computed AVE values are all greater than 0.5. CR and AVE have taken similar values for addressed
factors when other two estimators, BMCMC, and ULS, were conducted.
As it turned out for all three employed estimators, the discriminant validity of the measurement
sub-model was also similarly confirmed. So, the condition
AVE CORR was always fulfilled,
irrespective of the type of used estimator. After the confirmation of all necessary tests in CFA
analysis, we became positively convinced that the independently observed measurement submodel is adequate. This so, we can reliably say that the transport indicators are indeed significantly
loaded on their own transport factors, as it was already implied in the case of EFA analysis.
Table 2. The convergent validity of the measurement sub-model (case of ML estimator)
Measure

Factor
CR

AVE

EI A

0.969

0.819

EI W

0.949

0.791

EI B

0.883

0.717

EI R

0.947

0.819

D. Structural equation model

Following the methodological framework in Fig. 4, the derivation of the structural sub-model was
the final stage of SEM modeling process. Here, both sub-models, measurement and structural, were
also connected and converted into the entire SEM model. Besides all the involved variables
introduced in the previous sections, the single-indicator factor EFF was also added to the entire SEM

model structure. This is logical since our primary interest in this study was to reveal and estimate the
causal paths between the integration factors EIW , EI A , EI B , EI R on one side, and the efficiency
factor EFF on the other side.
Table 3 shows the comparison of achieved estimation results for all used estimators, ML, ULS, and
BMCMC estimator. These results refer to the standardized weights of causal paths between
integration factors and efficiency factor, as well as to the standardized weights of correlations
among the integration factors themselves.
Table 3. Comparison of achieved estimation results (Maximum likelihood, Bayesian estimation,
Unweighted least squares)
Standardized
Weight on:

Type of relation

ML estimator

BMCMC
estimator

ULS estimator

Significance

EIW EFF

Causal path

0.421

0.41

0.408

yes

EI A EFF

Causal path

0.499

0.477

0.395

yes

EI B EFF

Causal path

-0.148

-0.13

-0.037

no

EI R EFF

Causal path

-0.009

-0.024

-0.05

no

EIW EI B

Correlation

0.538

0.537

0.429

yes

EIW EI R

Correlation

0.484

0.486

0.412

yes

EI A EI B

Correlation

0.502

0.53

0.464

yes

EI B EI R

Correlation

0.39

0.348

0.292

yes

EIW EI A

Correlation

0.166

0.153

0.177

no

EI A EI R

Correlation

0.165

0.158

0.225

no

Careful observation of results in Table 3 leads us to the following conclusions for all three used
estimators:
1. The weights of two causal paths and four correlations have been estimated as positive and
statistically significant;
2. Roughly speaking, all estimators have provided more or less similar results for those weights,
which were significant. This is particularly true for the ML and BMCMC estimators, which gave
quite comparable results. The results achieved by the ULS estimator slightly diverge from results
of other two estimators but are still comparable to them.
3. Since the results of all three estimators are sufficiently close to each other, we can derive similar
conclusions on their basis. Additionally, we can simultaneously apply the GOF indices of all
addressed estimators in order to carry out an as much reliable model fit evaluation as possible.
Table 4 shows the GOF indices obtained for the case of ML estimator. Their values were
compared with the required threshold values, given in the literature [1, 5, 6, 15]. Since the
comparison gave adequate results, it was concluded that the overall SEM model provides a
reasonably good fit to the data. As it turned out, the same conclusion was derived on the basis of
observing of GOF indices related to the ULS and BMCMC estimators.

Table 4. GOF indices for developed SEM model (Maximum likelihood case)
Fit Index

Description

Value for ML
estimator

Chi Square 2 of the discrepancy between the

sample and the fitted covariances' matrices

152.329

2
df

Re lative Chi Square 2 of the discrepancy

1.058

RMSEA

Root Mean Square Error of Approximation

0.031

Normed fit Index

0.911

Non Normed fit Index Tucker Lewis Index

0.993

CFI

Comparative Fit Index

0.995

IFI

Bollens Incremental Fit Index

0.995

Standardized Root Mean Square Residual

0.0602

NFI
NNFI (TLI)

SRMR

Based on estimation results presented in table 3, Fig. 5 can be created, which corresponds to
the conceptual framework shown in Fig. 3. Fig. 5 represents the final estimated SEM model, where
the retained indicator items are also depicted. Dashed lines refer to the causal paths or
correlations with statistically insignificant weights (c.f. Table 3).
Achieved results imply that the effect of factors EI B and EI R on efficiency EFF cannot be
supported, so the hypotheses H 3 , H 4 are rejected. However, on the other side, the first two
hypotheses,

H 1 and H 2 , evidently can be accepted, which implies that the effect of factors EIW

and EI A on efficiency EFF is confirmed in this study.

Figure 5. The main properties of the final estimated SEM model

E. Discussion about achieved results

On the basis of obtained results, we can say that the external integration with water and air
suppliers has some positive impact on the efficiency of the agencies. This so, the amplified level of
integration would probably also lead to their higher efficiency. In other words, if the addressed
agencies increase the level of interaction, collaboration, and consultation with the water and air
suppliers as much as possible, the result would most likely be a higher financial profit and bigger
number of satisfied customers, as well as a lower level of operational costs.
The reason why the hypotheses H 3 , H 4 have not been supported should be deeper inspected.
Perhaps the sample size was too small, or the addressed agencies have quite distinct
characteristics. Namely, they possess their own transport vehicles, so it is probably counterproductive to hire the latter from elsewhere. Additionally, since the railway infrastructure in
agencies neighborhood does not provide perfect driving conditions, the agencies leaders
expressed particular doubt about deepening the collaboration with the railway authorities.
VI. CONCLUSION
The paper addressed the relationships between external integration with different transport
suppliers on one side and efficiency of travel agencies located in Croatia on the other side. For this
purpose, the SEM model was developed on the basis of the data collected by the means of a
survey. While conducting the SEM modeling process, the EFA and CFA analyses have been also
applied. For the calculation of efficiencies, the DEA analysis was performed.
The primary focus of the paper was the comparison of the performance of three different
estimators, used in the SEM modeling procedure. Within the estimation framework, the following
estimators were studied: Maximum likelihood estimator, Bayesian estimator, and Unweighted least
squares estimator. The achieved standardized results show that all estimators have computed
similar significant weights of causal paths between EI factors and EFF factor, as well as similar
significant weights of correlations among EI factors themselves.
The investigation of GOF indices provided an evidence of good fit to the data performed by the
derived SEM model. The latter has revealed that enlarged integration with air and water suppliers
would most likely lead to increased efficiency. This might represent a very interesting finding for the
management from the financial profit and operational costs point of view.
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AUTHORS
A. Nataa Kovai, Phd, is the Higher Assistant at the Faculty of Tourism and Hospitality
Management, University of Rijeka, Opatija, Croatia (e-mail: [email protected]).
B. Darja Topolek, PhD, is the Assistant Professor at the Faculty of Logistics, University of Maribor,
Celje, Slovenia (e-mail: darja.topolsek@ um.si).
C. Dejan Dragan, Phd, is the Assistant Professor at the Faculty of Logistics, University of Maribor,
Celje, Slovenia (e-mail: [email protected]).
Manuscript received by 21 April 2015. [21 April 2015]
Published as submitted by the author(s).