Improving the validity of theory testing in logistics research using correlated components regression

The purpose of this logistics research methods article is to empirically test and introduce correlated components regression (CCR) as a new statistical technique that will improve the accuracy and validity in testing logistics theoretical models and hypothesised relationships. The purpose of the current study is to use CCR analysis as technique to address multicollinearity. Customer satisfaction data with parcel carriers is analysed with using CCR and multiple regression. To determine the best regression model of these two approaches, cross-validation R² values are used. In addition, comparisons are made to examine the standardised beta coefficients from both methods and to assess the possible impact from high levels of multicollinearity. Findings of the analysis suggest that CCR has a significantly higher cross-validation R² value and thus is determined the best model of these two approaches.