Nghiên cứu mối quan hệ giữa chất lượng dịch vụ ngân hàng điện tử với mức độ thỏa mãn và mức độ trung thành của khách hàng ở việt namastract

1 INTRODUCTION Necessity of the topic The development of information technology in banking has remarkably changed business strategies of commercial banks Instead of supplying traditional banking services, commercial banks has been taking advantage of information technology, especially internet, to provide customers with modern banking services (hereinafter referred to as e-banking) E-banking services bringvariousbenefits to banks such as decrease in number of banking staff and branches, and increase in number of transactions as well, thereby, banking cost will slump whereas profit will rocket For customers, e-banking services help them to rapidly and conveniently make transactions, and their travelling time and transaction cost can be saved as a result Thanks to a numberof benefits brought by e-banking services, commercial banks in Vietnam have been proactively investing in electronic infrastructure system to compete in this sector, however, they have not met higher and higher demand of customers and failed to satisfy customers as well as get loyal customers On the other hands, to well compete in e-banking sector, banks should understand criteria used by customers to assess e-banking service quality and then make solutions to improve their service quality and customer satisfaction In order to this, it is vital to develop a research model to determine the relationship among assessment criteria fore-banking service quality, customer satisfaction and customer loyalty affected by other intermediate factors (switching cost, customer trust, etc.) as well as to make orientation for competitive strategies of the banks Because of the above reasons, the topic named “Research on the relationship among e-banking service quality, customer satisfaction and customer loyalty in Vietnam” is chosen as research topic of the thesis 1.2 Research objectives - To research an overview of e-banking service quality, customer satisfaction, customer loyalty, switching cost, customer trust and the relationship among variables - To develop a research model on the relationship among e-banking service quality, customer satisfaction and customer loyalty affected by intermediate factors including switching cost and customer trust in e-banking sector in Vietnam - To test a hypothesis model to determine the relationship among e-banking service quality, customer satisfaction and customer loyalty in commercial banks in Vietnam - To propose some solutions for commercial banks in Vietnam to improve ebanking service quality based on the research result on the relationship among ebanking service quality, customer satisfaction and customer loyalty 1.3 Research questions Based on research objectives, research questions include: (1) Is there a relationship between overall e-banking service quality and ebanking service quality? (2) Is there a relationship between overall e-banking service quality and electronic information system quality? (3) Is there a relationship between overall e-banking service quality and banking service product quality? (4) Is there a relationship between customer satisfaction and overall ebanking service? (5) Is there a relationship between customer loyalty and customer satisfaction in e-banking service sector? (6) Does switching cost affect the relationship between customer satisfaction and customer loyalty in e-banking service sector? (7) Does customer trust affect the relationship between customer satisfaction and customer loyalty in e-banking service sector? 1.3 Research subjects and scope - Research subjects: the relationship among e-banking service quality, customer satisfaction and customer loyalty Impacts of switching cost and customer trust on this relationship - Research scope: in commercial banks of Vietnam, including state-owned commercial banks, private joint stock commercial banks and foreign commercial banks in Vietnam Research data is collected from customers of commercial banks in Vietnam 1.4 Research methodology • Research methodology: - Research methodology in this thesis is the combination of dialectical materialism and historical materialism • Research methods: - Statistical and comparative methods; - Synthetic and analytical methods; - Regressive and correlative methods 1.5 Thesis content Besides introduction, conclusion, list of reference documents, list of figures and appendix, the thesis is divided into five chapters: Chapter 1: Overview of the research issues Chapter 2: Rationale Chapter 3: Research methods Chapter 4: Research results Chapter 5: Some conclusions, proposals and further research directions 1.6 New contributions of the thesis • Academic and theoretical contributions Based on a general research of over 170 related documents in e-banking service quality sector, the thesis has made new academic contributions as follows: (1) Development of a new and comprehensive structural model to explain the relationship amongservice quality, customer satisfaction and customer loyalty in ebanking sector in Vietnam The previous works mainly focused on pair relationship (2) Extended research of two intermediate variables including bank switching cost and customer trust to consider their impacts on the relationship between customer satisfaction and customer loyalty (3) The thesis states a positive and close relationship between overall ebanking service quality and customer satisfaction and between customer satisfaction and customer loyalty However, unlike previous works, in the context of e-banking in Vietnam, intermediate factors such as switching cost and customer trust are stated to have no impacts • New proposals drawn from research results (4) Descriptive statistics result shows that e-banking service users in Vietnam are young and highly qualified (higher education level) with good income Thus, marketing strategies of banks should aim at such potential customers (5) The research result shows that overall e-banking service quality has a positive correlation with online information system quality and banking service product quality and there is no basis to conclude that there is a correlation between overall e-banking service quality and online customer service quality Thus, it is proposed that in order to improve overall e-banking service quality, banks should focus on strongly investing enhancing information system quality and developing new products to meet customers’ demands (6) Customer satisfaction has a very strong positive correlation with overall e-banking service quality and customer loyalty has a very strong positive with customer satisfaction as well Thus, to get loyal customers, marketing strategies of banks should aim at customer satisfaction by enhancing service quality (7) Intermediate variables including switching cost and customer trust have no impacts on the relationship between customer satisfaction and customer loyalty in e-banking sector in Vietnam (8) Based on the research result, the thesis makes some proposals on business strategies to commercial banks in e-banking sector CHAPTER OVERVIEW OF THE RESEARCH ISSUES 1.1 Situation of researches in the world So far, there have been some research works in the world on customer service quality, customer satisfaction and customer loyalty Such works focus on developing an assessment model of customer service quality, the relationship among service quality, customer satisfaction and customer loyalty, developing assessment criteria and measurement scale as well as using econometric methods to test the relationship among variables Gronroos (1984,1990)introduced a service quality model to research customer feelings based on three basic factors including distinction of functional quality (serving manners such as behaviors and acts of staff to customers) and technical quality (serving media such as computer system, technical and technological solutions); image played the most important part in service supply enterprises;overall feeling about quality was a mathematic function of customers’ assessment of service quality and difference between such assessment and their service expectations The author generalized as follows: Service quality = Technical quality + Functional quality Parasuraman et al (1985, 1988) introduced a service quality measurement model (called as SERVQUAL) SERVQUAL model was developed based on the concept that service quality was the comparison between expected value and experienced value of customers According to the author, Service quality = Experienced value - Expected value Cronin & Taylor (1994) proposed a SERVEPERF model to assess service quality based on experimental research result in advertising industry in Australia and stated that this model was better than SERVQUAL model of Parasuraman However, this is still in argument because such model result may vary depending on research contexts in research Besides, there are some research works of other authors mentioning impacts of service quality on customer satisfaction and customer loyalty Some works are in industries other than banking such as mobile information, advertising, tourism, etc.(Oliver, R.L 1993; Zeithaml, V.A., A Parasuraman & A Malhotra, 2001; Shankar, V., Smith, K., &Rangaswamy, A., 2003; Ting, D.H, 2004) Some researches are conducted in traditional banking context where direct contact between customers and banking staff is preferred (such asBloemer, J., Ruyter, K.,& Peeters, P, 1998; Caruana, A 2002; Jamal, A & K Naser, 2002; Baumann, C.S Burton & G Elliott, 2005; Ehigie, B.O, 2006; Calik and Balta, 2006) Moreover, a few researches are conducted in e-banking context where the first distribution and contact channel are not via direct human contact (Jun & Cai, 2001; Broderick,A.J & S Vachirapornpuk, 2002; Rotchanakitumnuai, S & M Speece (2003); Jun, M., Z Yang & D.S Kim, 2004; Veloutsou, C., S Daskou & A Daskou, 2004; Jaruwachirathanakul, B & D Fink (2005); Siu, N.Y.M & J.C.W Mou, 2005; Pikkarainen, K., T Pikkarainen., H Karjaluoto & S Pahnila, 2006; Maenpaa, 2006) 1.2 Situation of researches in Vietnam So far in Vietnam, there have been some research works on service quality, customer satisfaction and customer loyalty as well as the relationship among variables Such researches have chosen assessment model, determined assessment criteria of service quality, customer satisfaction and loyalty; used econometric methods to test the relationship among variables, typically research of Nguyen Thi Mai Trang (2006) on service quality, customer satisfaction and customer loyalty in supermarkets in Ho Chi Minh City; research of Nguyen Huy Phong and Pham Ngoc Thuy (2007) on comparison of SERVQUAL (Parasuraman, 1985) and SERVPERF (Cronin and Taylor, 1997) in retail supermarkets of Vietnam; research of Nguyen Thanh Cong and Pham Ngoc Thuy (2007) on factors affecting customer loyalty to cell phone brands; research of Nguyen Thi Phuong Cham (2008) on comparison of SERVQUAL and Gronroos on service quality and customer satisfaction to select the best model for Vietnam; research of Nguyen Thi Mai Trang and Tran Xuan Thu Huong (2010) on library service quality and comparison of functional/technical quality model and SERVQUAL; research of Nguyen Duy Thanh and Cao Hao Thi (2011) on e-banking acceptance and use model in Vietnam; research of Le The Gioi and PhD Le Van Huy (2012) on the relationship among service quality, customer satisfaction and customer loyalty in banking sector; research of Le Thi Tuyet Trinh (2012) on customer satisfaction with Viettel mobile telecommunication services in Binh Dinh; research of Pham Van Tuan (2014) on impacts of customer satisfaction on customer loyalty and repeated purchasing behavior of customers in garment industry, etc 1.3 Research gaps and research issues After studying research works in the world and in Vietnam, there are some research gaps to be researched as follows: - There has been no thesis comprehensively researching the relationship among service quality, customer satisfaction and customer loyalty in e-banking sector The previous researches in Vietnam only mention the relationship between service quality and customer satisfaction or between service quality and customer loyalty Such researches are not in banking sector (mobile information, tourism, etc.) or in traditional banking sector other than e-banking sector (retail banking service) Moreover, researches in e-banking sector focus on factors affecting the model adoption instead of the relationship among service quality, customer satisfaction and customer loyalty There are some researches on the relationship amongservice quality, customer satisfaction and customer loyalty in traditional banking sector but they fail to consider impacts of intermediate factors such as switching cost and customer trust on the relationship among variables - Previous researches have not developed an appropriate theoretical model to explain the relationship among e-banking service quality, customer satisfaction and customer loyalty in Vietnam (with impacts of intermediate factors) - Analysis methods used in previous researches are limited and the most commonly used method islinear regression to test relationships and some researches use Structural Equation Model (SEM) but they fail to consider impacts of intermediate variables on relationships due to limited tools Because of such research gaps, the topic named “Research on the relationship among e-banking service quality, customer satisfaction and customer loyalty in Vietnam” is chosen as the research topic of the thesis CHAPTER RATIONALE 2.1 Electronic commerce 2.1.1 Definition of electronic commerce There are various definitions of electronic commerce (e-commerce) According to World Trade Organization (WTO), “e-commerce includes production, advertisement, sales, distribution and payment of goods purchased and sold on the Internet but with tangible deliverables, including delivered goods and digital information via Internet.” According to Electronic Commerce Steering Group of Asia-Pacific Economic Cooperation (APEC), "e-commerce relates to commercial transaction of goods and services conducted among groups (individuals) electronically via Internet-based systems.” According to European Commission, “e-commerce can be generally defined as purchase, sales and exchange of goods or services among enterprises, families, individuals and private organizations by electronic transactions via Internet or intermediate computer networks (online communication information) This term includes order and translation via computer network, however, final payment and transport of goods and services may be performed online or manual.” Zwass (1996) defined e-commerce as business information sharing, relationship maintenance and transaction making via Internet-based devices According to Turban et al (2000), e-commerce isa process of purchase, sale, transport and exchange of products, services and information via computer network including Internet Jelassi and Enders (2004) defined e-commerce as the settlement of transaction problems, product sales and other online services Based on the above definitions, we can seethat e-commerce definitions are used in both broad and narrow meaning, including Internet use for electronic communication and information exchange of products and services However, ecommerce also includes business transactions related to order and payment via Internet (Lin, 2003) 2.2 E-banking service 2.2.1 Definition of e-banking service The State Bank of Vietnam defines e-banking service as modern and multifunctional banking products and services rapidly distributed to wholesale and retail customers (online, 24 hours per day and seven days per week, anywhere atanytime) via distribution channels (Internet and other terminal access equipment such as computers, ATM, POS, landline telephone, cell phones, etc.) Thus, it can be understood that e-banking services are banking services supplied via electronic media and telecommunication network 2.2.2 Benefits of e-banking services For banks: E-banking services create a new distribution channel for banking services For customers:Using e-banking services with electronic media connected to telecommunication network enable customers to make their transactions anywhere and anytime For society:E-banking services create a brand-new operation method and contribute to promoting economic activities, trade, services and tourism as well as facilitate the expansion of economic and commercial cooperation with the region and the world 2.2.3 Distribution channels of e-banking services Nowadays, popular distribution channels of e-banking services include: Internet banking Home banking Phone banking Mobile banking/SMS banking Call center 2.2.4 Electronic payment instruments To make electronic transactions, various payment instruments are used such as: Digital payment Digital cheque Stored value smart card 2.3 E-banking service quality 2.3.1 Service quality There are various definitions of service quality by researchers such as definitions of European scholars (Gronroos 1982, 1984; Lehtinen & Lehtinen, 1982) and viewpoints of American scholars (Parasuraman et al., 1985, 1988) According to Gronroos (1982, 1984), service quality must include three aspects including technology quality (technical) and performance quality (functional) and impacts of company image Service quality = Technical quality + Functional quality According to Parasuraman et al (1985), service quality is the comparison between expected value and experienced value of customers and the comparison can be shown in the following formula: Service quality = Experienced value - Expected value According to Zeithaml et al (2002), e-service quality may be considered as a website to make purchase, sale and receipt of products and services more effective and convenient According to this definition, service is comprehensive and includes pre-electronic services and post-electronic services 2.3.2 E-banking service quality Despite the importance of assessment criteria of e-banking service quality, there is only a few documents includingand studying typical characteristics of ebanking service quality Such characteristics are mentioned in researches of Jun&Cai(2001); Polatoglu&Ekin(2001); Flavian, Tores&Guinaliu(2004); Jayawardhena (2004); Yang and Fang (2004); Bauer &Hammerschmidt(2005); Siu&Mou(2005);Maenpaa(2006); Pikkarainen et al (2006), etc Within research scope of this thesis, the author uses the definition of overall e-banking service quality (Jun&Cai, 2001; Yang et al., 2004) This definition generally assesses e-banking service quality based on three aspects including online customer service quality measured in availability, reliability, satisfaction and understanding (Jun&Cai, 2001); online information system quality (Jun & Cai, 2001) measured in ease of use, accuracy, confidentiality, contents and appearance; banking service product quality (the number of services, additional services, free utilities, necessary functions for customers, service characteristics that customers need) (Jun&Cai, 2001, Yang et al., 2004) 2.4 Customer satisfaction Satisfaction is a customer reaction when their demands are met (Oliver, 1993) It is also a customer reaction when there is a difference between their expectations and experience after using products and services (Tse & Wilton, 1988) Satisfaction is a personal feeling such as pleasure or disappointment resulting from comparing perceived performance(or outcome)from product in relation to his or her expectations (Kotler, 2000) Customer satisfaction is a psychological process of assessing perceived outcome in comparison with their expectations (Egan, 2004) According to Parasuraman et al (2005), there are some differences between service quality and customer satisfaction and the main difference is causal issue According to Zeithalm (2011) [147], customer satisfaction is affected by many factors including service quality, product quality, situation, price and personal factors In general, “Customer satisfaction is an emotional state that their demands and expectations of product and service values/benefits are met at a lower, equal or higher level than their expectations and itresults in customer loyalty and repeated product and service purchase” 2.5 Customer loyalty There are three main approaches to research customer loyalty including behavioral approach, attitudinal approach and general approach The combinationapproach includes both behavior and attitude variables to make a separate definition of customer loyalty “Behavioral loyalty” is mainly shown by the number of purchased goods, purchase frequency and brand switching (Allen and Meyer, 1990; Oliver, 1993) “Attitudinal loyalty” is the combination of purchase favorites and priority of customers to determineloyalty level (Egan, 2004) Loyal customers with“attitudinal loyalty” rarely accept negative information on brand in comparison with other customers (Ahluwali et al., 1999), have a few motives to search for other alternative services even they are extremely disappointed (Dick and Basu, 2001) and tend to rapidly and positively advertise good features of service via oral communication as well as use additional services and accept reasonable price (Gremler and Brown, 1999) Thus, loyalty is a definition which can be approached and shown in various ways However, in this thesis, the author chooses the combinationapproach which includesboth behavioral and attitudinal loyalty Accordingly, loyal customers tend to keep on using products and services (repeated purchase), commit to prioritizing selection of products and services and introduce products and services to other people (oral communication) 2.6 Research model 2.6.1 Research model Because some researches have tested the relationship among decisivefactors of e-baking service quality, overall e-banking service quality, customer satisfaction, trust, switching cost and loyalty, in order to handle research gaps, this research proposes some hypotheses, in which, the above definitions are integrated in the context of Vietnamese banking system A research model of the relationship among the above definitions is developed as follows: 10 Customer trust Online customer service quality H1+ H2+ H6+ Overall ebanking service quality Information system quality H4+ H5+ Customer Customer loyalty satisfaction H7+ H3+ Banking service Switching cost product quality Figure 2.1: Research model 2.6.2 Research hypotheses Based on a general research of documents on e-service quality, customer satisfaction and customer loyalty, some hypotheses are developed in the context of Vietnamese banking system: Hypothesis (H1): Online customer service quality and overall e-banking service quality have a positive correlation Hypothesis (H2): Online information system quality and overall ebanking service quality have a positive correlation Hypothesis (H3): Banking service product quality and overall e-banking service quality have a positive correlation Hypothesis (H4): Overall e-banking service quality and customer satisfaction have a positive correlation Hypothesis (H5): Customer satisfaction and customer loyalty have a positive correlation Hypothesis (H6): Switching cost has an impact on the relationship between customer satisfaction and customer loyalty Hypothesis (H7): Customer trust has an impact on the relationship between customer satisfaction and customer loyalty CHAPTER RESEARCH METHODS 3.1 Research design 3.1.1 Research steps The research is performed via the following specific steps: Step 1: Generally research and develop model and system of research hypotheses Step 2: Develop questionnaire for data collection Step 3: Run a measurement model to assess reliability and validity of measurement scale In order to assess reliability and validity of measurement 11 scale, the thesis uses Cronbach’s Alpha coefficients, composite reliability and average variance extracted (AVE) Step 4: RunStructural Equation Model (SEM) to test hypotheses in theoretical model In order to test theoretical model, the author develops three alternative structural models and selects the best model based on model running result Step 5: Summarize research results based on model test result Step 6: Conclude and propose solutions 3.1.2 Research population and samples In order to collect research data, the thesis uses questionnaires Questionnaires are sent to personal customers of commercial banks in large cities of Vietnam, both in hard and soft copies The number of issued questionnaire is 550 and the number of collected questionnaire is 511 (the number of observations is 10 times more than the number of variables) 3.1.3 Measurement scale 3.1.3.1 Measurement scale development The thesis uses 7-point Likert scale, “1= strongly disagree, 2= disagree, 3= slightly disagree, 4= neither agree nor disagree, 5= slightly agree, 6= agree, 7= strongly agree” Based on the research objectives after general research, there are eight latent variables put into the research model including Online customer service quality, Online information system quality, Banking service product quality, Overall e-banking service quality, Customer satisfaction, Customer loyalty, Switching cost and Customer trust * Online customer service quality includes four components such as tangible, reliability, responsivenessand understanding (Yan et al., 2004) Tangibleis measured bythree observed variables, reliability is measured bythree observed variables, responsivenessis measured by two observed variables and empathyis measured by four observed variables ONLINE CUSTOMER SERVICE QUALITY Code Tangible T_1 Banks’ websites supply customers with a lot of valuede-banking information T_2 Searching for e-banking information on banks’ websites is simple T_3 Banks’ websites are attractive Reliability Banks always fulfill their responsibilities in e-banking transactions with R_1 customers R_2 E-banking transactions are always made properly In case of problems in e-banking transactions of customer, banks strictly R_3 handle such problems Responsiveness Res_ Bank staff supply customers with information of exact time that e-banking services requested by customers are performed Res_ Bank staff help customers rapidly complete e-banking transactions 12 Understanding Bank staff consider customer benefits as a top priority in e-banking E_1 transactions Bank staff understand specific demands of customers in e-banking E_2 transactions Bank staff pay attention to issues related to customers in e-banking E_3 transactions E_4 Customer support hotline of banks is very useful * Online information system quality includes three components such as ease of use (access), accuracy and safety Ease of use is measured byfive observed variables, accuracy is measured bythree observed variables and safety is measured by four observed variables ONLINE INFORMATION SYSTEM QUALITY Code Ease of access Information arrangement on banks’ websites helps customers simply EU_1 search for information EU_2 Access to e-banking accounts is simple EU_3 Using banks’ websites in e-banking transactions requires much effort EU_4 Making an e-banking transaction via banks’ websites is simple I not have to spend much time searching for e-banking service EU_5 information via banks’ websites Accuracy A_1 Online transactions of customers are always made properly A_2 E-banking service information on banks’ website is accurate A_3 Online transactions are made properly Safety I believe that Banks not use personal information of customers for S_1 wrong purposes S_2 I feel safe in e-banking transactions via banks’ websites Sensitive information of customers in e-banking transactions via banks’ S_3 websites is secured Exposure of risks related to online transactions via banks’ websites is S_4 low * Banking service product quality is measured by five observed variables Code BANKING SERVICE PRODUCT QUALITY BSP_1 Banks supply e-banking services that customers want BSP_2 Banks supply most of online service functions that customers need BSP_3 All demands on online services of customers are in categories of banks BSP_4 Banks supply various online service packages BSP_5 Many free online services are supplied by banks * Overall e-banking service quality is measured by two observed 13 14 variables Code OVERALL E-BANKING SERVICE QUALITY O_1 Generally, e-service quality of banks is good Generally, banks meet customers’ expectations of components of good O_2 e-banking service quality * Customer satisfaction is measured by four observed variables Code CUSTOMER SATISFACTION CS_1 Generally, I am satisfied with e-banking transactions with Banks CS_2 Generally, I am satisfied with Internet-based transactions of Banks CS_3 Generally, I am satisfied with products and services supplied by Banks Generally, I am satisfied with the bank that I am making transactions CS_4 with * Customer loyalty is measured by three observed variables Code CUSTOMER LOYALTY I will keep on making e-banking transactions via the bank that I am L_1 making transactions with The bank that I am making transactions with always is my first choice in L_2 e-banking transactions I will introduce the bank that I am making transactions with to my L_3 friends and relatives * Switching costis measured by five observed variables Code SWITCHING COST SC_1 It takes me a lot of time to make e-banking transactions in another bank SC_2 Making e-banking transactions in another bank will be more expensive It is difficult to familiar with new procedures on e-banking transactions SC_3 in other banks SC_4 It will be uncomfortable to make e-banking transactions in other banks I have invested much (effort, money, time, etc.) into building SC_5 relationship with Banks * Customer trust is measured by three observed variables CUSTOMER TRUST Code Tr_1 I trust in e-banking services supplied by Banks Tr_2 Accounts for my e-banking transactions in Banks are extremely safe Tr_3 I believe that heads of banks always pay attention to customer benefits E-banking service quality and electronic information system quality variables are comprised of many components and each component is measured by observed variables, thus, the author uses summated scale, in which, each component variable is the average of observed variables Such average calculation has no impacts on representation of variables (Bagozzy & Heatheation, 1994) 3.1.3.2 Reliability of measurement scale In order to consider reliability of measurement scale, Cronbach’s Alpha coefficient will be applied This method helps the analyser to eliminate inappropriate variables and limit garbage itemsduring research and assess of reliability of measurement scale by Cronbach’s Alpha coefficient Table 3.1: Summary of Cronbach’s Alpha coefficient of variables No Name of variables Cronbach’s Alpha Online customer service quality 0.870 Online information system quality 0.850 Banking service product quality 0.891 Overall e-banking service quality 0.856 Customer satisfaction 0.908 Customer loyalty 0.845 Switching cost 0.879 Customer trust 0.861 Source: Calculation from survey data Thus, after calculating Cronbach’s Alpha coefficient of variables in the model, it can be shown that all variables have Cronbach’s Alpha coefficient of more than 0.8 soall measurement scales are reliable 3.2 Structural Equation Model (SEM) 3.2.1 Overview of SEM SEM (Structural Equation Model) is one of the most complex and flexible techniques used to analyze the complicated relationship in causal model SEM is an expansion of the generalized linear model (GLM) which allows researchers to test a group of regression equations at the same time 3.2.2 Statistical steps in SEM Step 1: Test reliability of measurement scale Use Cronbach’s Alpha coefficient (Hair et al., 1998; Segar, 1997) Estimate regression coefficient and tvalue Confirmatory factor analysis (CFA): Use measurement scale to eliminate variables with low potential factor loading Apply CFA to each sub-model before test the general model Perform Square Multiple Correlation (SMC)to each external latent concept (CFA result the above measurement scale), similar to coefficient R2 in linear regression, SMC is a variance to explain each latent concept (Bollen, 1989) Step 2: Goodness of fit of the model population Actual goodness of fit of the general model is assessed by the following criteria: Chi-Square (χ2) test shows the general goodness of fit of the whole model at pv=0.05 (Joserkog & Sorbom, 1989) This rarely occurs in fact because χ2is extremely sensitive to large sample size and test strength, thus, only χ2/df is used to assess in fact Chi-Square to df ratio (χ2/df) is also used to measure goodness of fit of the whole model more detailedly Some authors suggest 1< χ2/df