Does Satisfaction Moderate
the Association between Alternative
Attractiveness and Exit Intention
in a Marketing Channel?
Robert A. Ping, Jr.
Wright State University
This study investigated the predicted moderating effect of
satisfaction on the association between the attractiveness
of the alternative relationship and exit intention in a mar-
keting channel. The study used a variation of the Kenny
and Judd structural equation technique proposed by the
author. The results suggested that for channel customers
with lower satisfaction, alternative attractiveness was
positively associated with exit intention. When satisfaction
was higher, however, alternative attractiveness had no
association with exit intention. The implications of these
results are discussed.
Channel relationship termination has received some
attention in recent studies (Ping and Dwyer 1991; Ping
1993a). These studies generally contend that exit intention
in a channel relationship has several antecedents, among
them overall satisfaction and the attractiveness of the best
alternative relationship. The associations among these
variables have been modeled using linear effects, and
nonlinear effects have been assumed to be absent. This
study investigates a plausible nonlinear effect involving
these variables: the interaction of overall satisfaction and
alternative attractiveness in their effect on exit intention.
It uses a field survey and a structural equation technique
proposed by Ping (1993b) that estimates interaction and
quadratic effects for latent variables.
The results fill a gap in the channel reactions-to-
dissatisfaction literature and extend Ping's (1993a) find-
Journal of the Academy of Marketing Science.
Volume 22, No. 4, pages 364-371.
Copyright 9 1994 by Academy of Marketing Science.
ings by providing a deeper understanding of the major
antecedents of exit intention. They also provide empirical
support for the long-term buyer-seller relationship frame-
work proposed by Dwyer, Schurr, and Oh (1987) and
others by showing an effect predicted by Dwyer, Schurr,
and Oh (1987): that higher satisfaction attenuates the al-
ternative attractiveness-exit intention association.
After summarizing the current knowledge about chan-
nel relationship exit intention, a satisfaction-alternative
attractiveness interaction is proposed and tested using a
field survey and the Ping technique. The implications of
the results are then discussed.
CHANNEL RELATIONSHIP TERMINATION
In an investigation of generalized responses to channel
relationship problems, Ping (1993a) observed that the
intention to exit a channel relationship was negatively
associated with overall relationship satisfaction and posi-
tively associated with the attractiveness of the best avail-
able alternative relationship. The specification of these
relationships involved a structural equation analysis of a
model that implicitly posited only linear relationships.
In a conceptualization of the history of a buyer-seller
relationship, Dwyer, Schurr, and Oh (1987) proposed that
these relationships pass through several phases (see also
Ford 1980; Gadde and Mattsson 1987). Both parties to the
buyer-seller relationship, they argued, pass through aware-
ness, exploration, expansion, commitment, and, ulti-
mately, dissolution phases of the relationship. They noted
that exchange partners in the committed phase achieve a
level of satisfaction that precludes other primary exchange
partners. They stated that awareness of alternative relation-
ships is maintained, but without constant comparisons to
the current relationship. One plausible result of this pre-

clusionary state is that for satisfied firms, increases in the
attractiveness of alternative relationships would not affect
relationship exit intention. Ping (1993a) observed a posi-
tive association between alternative attractiveness and exit
intention, however; this suggests that the association is
contingent on the level of overall relationship satisfaction.
In particular, if Dwyer, Schurr, and Oh (1987) are correct,
when overall satisfaction is lower, changes in alternative
attractiveness should be positively associated with exit
intention. At higher levels of satisfaction, however, this
association should not be significant. Accordingly,
HI: Overall relationship satisfaction moderates
the association between alternative attrac-
tiveness and exit intention.
Specifically,
H2a: At higher levels of overall relationship satis-
faction there is no association between alter-
native attractiveness and exit intention,
and
H2b: At lower levels of overall relationship satis-
faction alternative attractiveness is positively
associated with exit intention.
The remainder of the article reports a test of these hypothe-
ses using data provided by a field survey.
MEASUREMENT
Satisfaction, the global evaluation of relationship ful-
fillment by the firm (Dwyer and Oh 1987), was measured
using a modification of the Dwyer and Oh satisfaction
scale inspired by Gaski and Nevin (1985). The domain of
satisfaction includes all the characteristics of the buyer-
seller relationship that a firm deems "rewarding, profit-
able, or instrumental" (Rukert and Churchill 1984), or
costly, unfair, or frustrating (Ping 1993a). The five items
in the satisfaction measure assessed the buyer firm's over-
all satisfaction with the relationship (two items), fairness
in the exchange relationship (two items), and the degree to
which the seller firm was a good company with which to
do business.
The attractiveness of the best alternative relationship, a
firm's estimate of the satisfaction available in the best
available alternative relationship, was operationalized as
the buyer firm's perception of the overall fulfillment avail-
able from the best alternative supplier, in addition to the
overall fulfillment available in the existing buyer-seller
relationship (Ping 1993a). The conceptualization encom-
passes a firm's generalized perceptions of the rewards and
costs available in the most salient available relationship
alternative. The four items in this measure dealt with the
buyer firm's evaluation of how good a supplier company
Ping / ALTERNATIVE ATTRACTIVENESS & EXIT INTENTION 365
the alternative would be (1) its fairness, (2) its products
and services, (3) its policies and, (4) in general, how
satisfied the firm would be with the alternative supplier.
Exit intention, the intention to physically leave the
relationship, was operationalized as the propensity to ter-
minate the primary supplier relationship (Ping 1993a). The
conceptualization taps the degree of intention to discon-
tinue the relationship with the economic exchange partner.
The six items in the exit intention measure concerned the
buyer firm's thinking of exiting, looking for a replacement
supplier, considering a replacement (two items), and re-
solving to end the relationship (two items).
These measures were combined into a self-administered
questionnaire that was mailed to a sample of hardware
retailers. The analysis of the resulting data was conducted
using structural equation analysis with a satisfaction-alternative
attractiveness latent variable interaction specified using
the Ping technique. Before describing the study, however,
some background on the estimation of nonlinear effects in
structural equations is appropriate.
NONLINEAR LATENT VARIABLES
Kenny and Judd (1984) proposed that interaction and
quadratic latent variables could be specified using indica-
tors that are products of observed variables. They proposed
that products of the indicators for the linear latent variables
X and Z, for example, would specify the latent interaction
variable XZ. Specifically, if X had indicators x~ and x2 and
Z had indicators z~ and z2, respectively, XZ is specified
using the indicators XlZl, XlZ2, X2Zl, and x2z2.
In addition, they showed that under certain conditions,
the variance of these indicator products is determined by
their constituent indicators. They showed that, for exam-
ple, the variance of the indicator x~zz depends on ~1, ~,,1,
Var(X), Var(Z), 0~xl, and 0~zl, where Var(X) and Var(Z) are
the variances of the latent variables X and Z, ~1 and ~1 are
the loadings ofxl on X and z~ on Z, and 0~xl and 0~zl are the
variances of the error terms exl and ez~. Specifically, assum-
ing the latent variables X and Z are independent of the error
terms exl and ~1; the error terms are independent of each
other; and x~, Zl, ~1, and e,l are normally distributed, they
showed the variance of XlZl is given by
Var(xlzl) = Var[(k, lX + gxl)(~.zlZ+ ez0]
= ~xl2 ~zl2 Var(XZ) + ~xl2 VaF(X)0ez1 (1)
+ ~.,12Var(Z)0exl+ 0Exl0c,1.
They then specified latent variables such as X Z with
indicators such as XlZl by constraining the indicator loading
and error term for XlZl (Xxlzl and 0~xlzl)to be the combina-
tions of the parameters shown in equation (1), that is,
~'xlzl = ~xl~'zl (2)
and
0exlzl = ~xl 2 War(X)0ez1 + ~12 Var(Z)0ex 1 + 0exl0ezl. (3)
366 JOURNALOF THE ACADEMYOF MARKETINGSCIENCE
They also used COSAN (currently a subprocedure of the
SAS procedure CALIS), which is particularly suited to
modeling structural equations with nonlinear terms such
as those in equations (2) and (3).
Although the Kenny and Judd technique is an important
theoretical contribution, it has proven difficult for re-
searchers to implement (Aiken and West 1991). The num-
ber of dummy variables required to specify each indicator
of a nonlinear variable using the Kenny and Judd technique
(e.g., one for each term in equations [2] and [3]) can
become tedious for models with many indicators or several
nonlinear latent variables (Ping 1993b). 1
Hayduk (1987) and others have proposed a variation of
the Kenny and Judd (1984) technique that can be imple-
mented using LISREL (Jtreskog and Strbom 1989) and
EQS (Bentler 1989). The technique is difficult to summa-
rize, however, and the interested reader is directed to
chapter 7 of Hayduk (1987) for details. Unfortunately, the
technique also requires the specification and estimation of
many dummy variables.
As a result, Ping (1993b) proposed an additional vari-
ation of the Kenny and Judd technique that requires no
dummy variables and can be implemented in LISREL and
EQS. The technique is carried out in two steps, paralleling
the two-step estimation approach for structural equation
suggested by Anderson and Gerbing (1988)--estimate the
measurement model before estimating the structural
model.
The measurement parameters for the linear latent vari-
ables are estimated in a measurement model. These esti-
mates are used to calculate the loadings and error variances
for the indicators of the interaction variables in equations
(2) and (3). The interaction variables are added to the
model, and the calculated loadings and error variances for
the indicator products are specified as fixed rather than free
variables in the structural model.
Under the Kenny and Judd normality assumptions, and
assuming the unidimensionality of each linear latent vari-
able, Ping suggested that the loadings and error variances
for the Kenny and Judd product indicators of an interaction
or quadratic latent variable need not be estimated in the
structural model. 2 Specifically, he proposed that parameter
estimates from the measurement model be used to compute
the loading and error variance for product indicators such
as xlz~ using equations (2) and (3). Then a structural model
with XZ can be estimated with these calculated interaction
indicator loadings and error variances (e.g., ~1zl and 0~xlzl)
specified as fixed values (set equal to the equation [2] and
[3] values for ~lzl and 0~xl~l).This is possible because with
sufficient unidimensionality, the measurement parameters
for a latent variable's indicators (e.g., ~1, ~,~1, Var[X],
Var[Z], 0~xl, and 0 ~ ) are trivially variant between the
measurement and structural models (Anderson and Gerbing
1988). In other words, the measurement parameter esti-
mates for the indicators of a sufficiently unidimensional
latent variable change very little between the measurement
and structural models (frequently only in the third decimal
place). As a consequence, the loadings and error variances
FALL1994
of product indicators can be determined using a measure-
ment model and equations (2) and (3), then specified as
constants in the structural model.
Ping also pointed out that the sufficient unidimension-
ality assumption enables the omission of the nonlinear
latent variables from the measurement model with no
effect on the parameter estimates for the linear latent
variables. By the definition of unidimensionality, unidi-
mensional constructs are unaffected by the presence or
absence of other latent variables in the measurement
model. Similarly, adding or deleting unidimensional con-
structs in the structural model does not affect the measure-
ment parameter estimates for the added or other latent
variables in the structural model.
The Ping technique involves
1. verifying indicator normality,3
2. assuming the latent variables are independent of
the error terms, and the error terms are inde-
pendent of each other (a standard structural equa-
tion assumption),
3. unidimensionalizing each linear latent variable,
4. centering the observed variables at zero by sub-
tracting the mean of a variable from each case
value for that variable (see Bollen 1989),
5. estimating loadings and error variances for the
linear independent variable indicators using a
measurement model,
6. using these estimates to calculate equation (2)
and (3) estimates of the loadings and error vari-
ances for the nonlinear latent variable indicators,
7. specifying equation (2) and (3) estimates as fixed
values in a structural model, then estimating that
model, and
8. repeating steps 6 and 7 as required to obtain
minimal change in the measurement parameters
between two structural model estimates (fre-
quently not necessary for strongly unidimen-
sional latent variables).
The balance of this article describes the field survey.
METHOD
To test the hypotheses, satisfaction, alternative attrac-
tiveness, and exit intention were measured with balanced
5-point Likert-type scales. The survey population was
hardware retailers, and the sampling frame was the sub-
scription list of a popular hardware trade publication.
Sampling involved nth name selections of 100 pretest
names and 600 final test names. The pretest responses were
used to verify the psychometric properties of the measures.
The resulting measures appeared to be content valid, uni-
dimensional, and internally and externally consistent (see
Gerbing and Anderson 1984); they each had a coefficient
alpha of .8 or above. The final test mailing yielded 288
responses by firms after two postcard follow-ups. The
psychometric properties of the measures were reexamined
 Ping / ALTERNATIVE ATTRACTIVENESS & EXIT INTENTION 367

FIGURE 1 TABLE 1
Linear-Terms-Only Measurement Model Measurement Model Results
Parameter Estimate Parameter Estimate

~'sl 0.79 es4 0.12

~'sz 0.88 es5 0.10
~'S ~
SAT~ / ~ ALT
~ ~ EXI ~s3 1.00 Ca1 0.27
~'s4 0.87 Ca2 0.24
~5 0,94 Ca3 0.07
~al 0.92 Ca4 0.24
tt I ltl It] \\ Xa2 0.90 e~i 0.52
~51 ~s2 ~s3 ~s4 ~s5 ~al ~a2 ~a3 ~a4 ~el ~e2 ~e3 ~el ~e5 ~e6 9~a3 1.00 s 0.19
~'a4 0.78 s 0.11
~i 0.84 ee4 0.32
NOTE: SAT = satisfaction, ALT = alternative attractiveness, EXI =
~z 0.83 ee5 0.09
exiting.
~'e3 1.00 Ee6 0.12
using these responses and item-to-total correlations, coef- ~e4 0,94 ~$AT 0.51
ficient alpha calculations, ordered similarity coefficients ~'e5 0.96 (PSAT,~LT --0.37
(Hunter 1973), multiple group analysis (Anderson, Gerbing, ~e6 0.92 qbSAT,EXl -0.43
and Hunter 1987), and LISREL single factor analysis esl 0.16 ~ALT 0.85
(J6reskog 1993, pp. 297, 313). The measures were content es2 0.13 ~ALT,EX~ 0.51
valid, unidimensional, and internally and externally con- es3 0.10 ~xI 0.78
sistent; they had latent variable reliabilities of .9 or above Equation 2 and 3 estimates
and average extracted variances of .7 or above (Fornell and ~'slal .533 0eslaI .257
Larker 1981). ~'sla2 .509 0esla2 ,239
The indicators for satisfaction and alternative attrac- IsXa3 .625 0~Xa3 .180
tiveness were then zero centered, the normality of all the ~'s144 .384 0~sxa4 .207
indicators was assessed, and the measurement model for ~'s2al .669 0es2a1 .242
the linear-terms-only model shown in Figure 1 was esti- ~LsZa2 .639 0esza2 .224
mated using EQS and maximum likelihood. The resulting ~243 .784 0es2a3 .151
measurement parameter estimates for satisfaction and al- ~'s2a4 .482 0~sza4 .198
ternative attractiveness are shown in Table 1. ~'s3al .852 0~3al .251
Because the latent variable intercorrelations were above ~s342 .815 0es3a2 .231
.5, latent variable discriminant validity was tested using ks3a3 1.000 0es3a3 .140
two-group measurement models. In this test, a measure- ~'s344 .615 0es3a4 .208
ment model with, for example, the satisfaction-exit inten- ks4al .657 0es4al .231
tion path fixed at 1 was nested in an identical model with ~'s442 .628 0es4a2 .213
that path freed. One degree of freedom tests of the differ- ~'s443 .770 0e.s4a3 .142
ences between these nested models suggested that satisfac- ~ks4a4 .473 0es4a4 .189
tion, alternative attractiveness, and exit intention were ~5al .755 0esSal .227
distinct. ~saZ .722 0essa2 .209
The measurement model parameter estimates were ~5a3 .885 0esSa3 .128
combined to produce equation (2) and (3) loadings and ~'s5a4 .544 Oes5a4 .188
error variances for the satisfaction-alternative attractive-
ness interaction indicators shown in the Figure 2 structural
model. This structural model was then estimated using
EQS and m a x i m u m likelihood by fixing the loadings and a result, contains the estimates from the second structural
error variances for the product indicators at the Table 1 model estimation. The Table 2 degrees of freedom for the
values. structural model has been reduced by the number of pre-
Because there were slight differences in the measure- viously estimated product indicator loadings and error
ment and structural model estimates for the measurement variances (40; see Table 1). 4
parameters of satisfaction and alternative attractiveness, an Because the use of product indicators in a structural
iterative approach was used to produce the Table 2 results. equation model renders the model formally nonnormal and
This was accomplished by recomputing equation (2) and maximum likelihood estimation assumes multivariate nor-
(3) values using the structural equation estimates of the mality, maximum likelihood standard errors for the struc-
measurement parameters for satisfaction and alternative tural effect coefficients are not formally appropriate
attractiveness, then reestimating the structural model with (Bollen 1989; see Hu, Bentler, and Kano 1992). The effect
these revised equation (2) and (3) values fixed. Table 2, as estimates appear to be robust to departures from normality,
368 JOURNALOF THE ACADEMYOF MARKETINGSCIENCE
FIGURE 2
Structural Model
Eel ~=2 E.3 ~s4 ~s5
~I $2 ~3 $4 ~5
S A T " ...
~ei ! S
el 9 "
ALT =- E X I :...r.,,e3 ",,----~.3
es 9 '
e 6 .,L
a I a 2 a 3 a~
~al ~a2 ~a3 ~a4
SAT*ALT
s 1 a I S l a 2. . . sla 4 s 2 a l . . . $5a4
/t tf
~slal ~sla2" 9 "~sla4 ~s2al" 9 .~s5a4
t tiveness-exit intention association was not significant. At
NOTE: SAT= satisfaction,ALT= alternativeattractiveness,SAT*ALT
= satisfaction-alternativeattractivenessinteraction,EXI = exiting.
but it is unknown whether the standard errors and chi-
square statistics are robust to departures from normality.
The structural model was therefore reestimated using a less
distributionally dependent estimator, EQS's Robust esti-
mator, to produce more distributionally appropriate
standard errors and chi-square statistics (Satorra and
Bentler 1988; see Bentler 1989, p. 217 et seq.; Hu, Bentler,
and Kano 1992).
The structural model was then reestimated in two steps
to assess the improvement in fit of adding the interaction
term. The result suggested that adding the interaction term
significantly improved model fit (see the incremental fit
index in Table 2). The Figure 2 model was also estimated
using the Kenny and Judd/COSAN approach for compari-
son. Because COSAN provides no distribution-free esti-
mators, only maximum likelihood estimates were
produced.
In addition, Table 2 shows OLS regression estimates for
the Figure 2 model as a directional point of reference.5
Regression estimates are known to be biased and ineffi-
cient for variables measured with error (Busemeyer and
Jones 1983). As a result, they provide only an indication
of the direction (positive or negative) of the Figure 2
effects. These regression estimates were produced by av-
eraging the indicators for satisfaction, alternative attrac-
tiveness, and exit intention, and creating the interaction term
by forming the product variable satisfaction-alternative
attractiveness in each case.
FALL1994
DISCUSSION
The Ping, Kenny and Judd/COSAN, and regression
results were directionally similar, and the t values for the
Ping technique and the Kenny and Judd/COSAN approach
generally lead to the same inferences. The maximum like-
lihood and Robust standard error estimates were also simi-
lar, whereas the chi-square estimates were not. Because the
Robust estimator does not assume multivariate normality
as the maximum likelihood estimator does, the Robust
~el estimator results will be interpreted.
Based on the Robust estimator, the model fit the data,
ees
and the hypothesized associations were supported. Satis-
(~e6 faction moderated the alternative attractiveness-exit inten-
tion association, as shown by the significant effect
coefficient for the alternative attractiveness-exit intention
interaction (see Table 2). In addition, satisfaction attenu-
ated the alternative attractiveness-exit intention associa-
tion as the level of satisfaction increased. Table 3 shows
the alternative attractiveness-exit intention effect coeffi-
cient at selected levels of satisfaction. As shown in this
table, at higher levels of measured satisfaction (e.g., above
4, which corresponded to "agree"), the alternative attrac-
lower levels of satisfaction, the alternative attractiveness-
exit intention association was statistically significant.
These results may have implications for practitioners.
The observed lack of association between exit intention
and alternative attractiveness at higher levels of satisfac-
tion in this study suggests that increases in the attractive-
ness of alternatives (competition) may not necessarily
tempt satisfied customer firms to consider exiting their
current buyer-seller relationship. In other words, an alter-
native's efforts to be more attractive to a target set of firms
may not, by themselves, increase exit intentions in these
firms; decreased satisfaction in the target firms may also
be required. Only for the less satisfied firms in this study
were changes in alternative attractiveness associated with
changes in exit intentions. For satisfied firms, changes in
alternative attractiveness were not associated with exit
intention.
This finding suggests that less satisfied firms may be
vulnerable to competitive moves aimed at increasing com-
petitor attractiveness, whereas more satisfied firms may
not be so vulnerable. This in turn may provide some insight
into a basic tenet in the customer service literature, that
superior customer service creates satisfaction, which leads
to a competitive advantage (see Davidow and Uttal 1989).
These results suggest not only that satisfaction may reduce
exit intention but also that it may reduce the attractiveness
of the competition. Hence superior customer service may
also reduce exit intention and the attractiveness of the
competition's superior service.
The model explained 65 percent of the variance in exit
intention, which is notable for marketing studies. This
result suggests that whereas unmodeled antecedents of exit
intention may remain to be identified, their combined
contribution to explaining variance in exit intention in this
 Ping / ALTERNATIVE ATTRACTIVENESS & EXIT INTENTION 369

TABLE 2
Structural Model Estimation Results
Structural Equation Analysis Estimates t Value
Parameter Estimate Parameter Estimate ML a ROBUST b

~sl 0.79 es5 0.10

~s2 0.88 Eal 0.27
~s3 1.00 Ea2 0.24
~bs4 0.87 ea3 0.08
Xs5 0.94 ea4 0.23
~Lal 0.92 Eel 0.53
~'a2 0.90 ee2 0.19
La3 1.00 ee3 0.11
~a4 0.78 Ee4 0.32
~'e] 0.84 ee5 0.09
Xe2 0.83 ee6 0.12
Le3 1.00 (~SAT 0.51
~4 0.94 ~SAT,ALT -0.37
~5 0.96 (~ALT 0.84
~6 0.92 (~SAT,ALr 17.95
esl 0.16 ~EXI 0.34
es2 0.13 ~EXI, SAT --0.35 --4.59 -4.79
Es3 0.10 [~EXI,ALT 0.65 10.58 9.61
es4 0.12 ~EXI, SAT,ALT -0.05 -5.64 -5.45

Fit indices
Chi-square 88,248 380
p value of chi-square value .000 1.000
Bender (1989) comparative fit index .000 1.000
Null model Z 2 25,884 18,831
Chi-square degrees of freedom 555 555
Squared multiple correlation for EXI .65
Total coefficient of determination .65
Incremental fit index: chi-square difference 3.91
p value .04

Kenny and Judd/COSAN estimates

~EXI, SAT -0.34 4.42
~EXI,ALT 0.67 10.67
[~EXI,SAT,ALT -0.04 5.41

OLS regression estimates

Dependent variable Independent variable b coefficient t Value F value and p R2
EXI SAT -.287 -7.3 79.52 (.00) .52
ALT .745 6.0
SATALT -. 100 -1.8

a. ML = maximum likelihood estimate.

b. ROBUST = ML estimate with EQS Robust option.

context may not be large. For the busy channel manager,
this in turn suggests that satisfaction maintenance may be
sufficient for relationship maintenance.
The t values for the maximum likelihood coefficient
estimates and those for the Robust option were similar,
whereas the chi-square estimates were not (see Table 2).
This suggests that standard errors produced by the Ping
technique may be robust to product indicator nonnormality
but that the chi-square statistic is not, and estimators that
are less distributionally dependent should be used for the
chi-square statistic with the Ping technique.
SUMMARY
The study investigated a hypothesized moderating ef-
fect of overall relationship satisfaction on the association
between exit intention and the attractiveness of an alterna-
370 JOURNAL OF THE ACADEMY OF MARKETING SCIENCE
TABLE 3
Satisfaction Moderation of the Alternative
Attractiveness-Exit Intention Association
SAT Valuea ALT Coefficientb SE of the Coefficient c t Value
1 0.596 0.1239 4.80
2 0.539 0.1859 2.89
3 0.482 0.2510 1.91
4 0.425 0.3173 1.33
5 0.368 0.3841 0.95
a. Satisfaction ranged from 1 (low) to 5 in the study."
b. The coefficient of ALT is given by .65ALT - .05SAT*ALT =
(.65 - .05SAT)ALT.
c. The standard error of the ALT coefficient is given by
"~Var(bALT-bsATSAT)
= ~/Var(bALT)+ SAT2VaI(bsAT)+ 2SATCov(bALT,bsAT).
tive relationship in a marketing channel. The results sug-
gest that the hypothesized moderating effect is present in
the study context, and that at higher levels of satisfaction,
there was no alternative attractiveness-exit intention effect
in the study population.
The investigation used the Ping technique and EQS to
estimate nonlinear latent variable effects. The results were
equivalent to those of Kenny and Judd/COSAN and were
generally plausible when compared to OLS regression
results. In addition, maximum likelihood and Robust
standard error estimates using the Ping technique were
similar, suggesting that maximum likelihood estimates
from the Ping technique may be robust to the departure
from normality inherent when product indicators are used.
The maximum likelihood and Robust chi-square esti-
mates, however, were very different. This suggests that
maximum likelihood chi-square estimates are affected by
product indicator nonnormality and that chi-square esti-
mates based on less distributionaUy dependent estimators
should be used with the Ping technique.
ACKNOWLEDGMENTS
The author wishes to thank E Robert Dwyer, Leona Aiken,
Leslie Hayduk, Robert Peterson, and two anonymous reviewers
for their contributions to this article.
NOTES
1. LISREL 8 reduces the specification effort using equations
but generates the d m n m y variables for equations (2) and
(3) using partial derivatives. Larger models, however, still
require considerable specification effort, and the many
d u m m y variables that result produce large matrices that
can create estimation problems (Ping 1993b).
2. The Kenny and Judd normality assumptions were stated
above equation (2).
3. Maximum likelihood and generalized least squares esti-
mates are robust to departures from normality (Anderson
and Amemiya 1985, 1986; Boomsma 1983; Browne 1987;
FALL 1994
H a r l o w 1985; Sharma, D u r v a s u l a , a n d Dillon 1989;
Tanaka 1984), and strict multivariate normality may not be
required.
4, This adjustment to the degrees of freedom was suggested
by Leslie Hayduk (personal communication).
5. The Kenny and Judd approach apparently has been ac-
cepted without any empirical justification. Kenny and Judd
(1984) reported estimates for one synthetic data set for an
interaction and one for a quadratic. There have been no
further investigations to justify or evaluate their technique,
and its performance under varying conditions is unknown.
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ABOUT THE AUTHOR
R o b e r t A. Ping, Jr. is an assistant professor in the Department
of Marketing at Wright State University, Dayton, OH. He ob-
tained his Ph.D. at the University of Cincinnati. His research
interests include the political economy of marketing channels and
nonlinear estimation for latent variables.