Table 1. Outer loadings, convergent...

Table 1.

Outer loadings, convergent validity, composite reliability and average variance extracted (AVE) for the formative measurement model for Latin America

Formative constructs	Construct indicators	External loads (> 0.5)	Convergent validity - redundancy analysis (> 0.7)	Collinearity (VIF < 5)	Composite reliability (> 0.7)	AVE (> 0.5)
Financial system			0.964		0.935	0.879
	GCI4.0: domestic credit to private sector value	0.827		2.35
	GCI4.0: value of market capitalization	0.993		2.35
ICT adoption			0.713		0.928	0.865
	GCI4.0: value of internet users	0.999		2.17
	GCI4.0: mobile-cellular telephony subscription value	0.701		2.17
Institutions			1.000		0.848	0.496**
	GCI4.0: value of budget transparency	0.512		1.32
	GCI4.0: effectiveness of the legal master in value adjustment regulation	0.400^*		9.65***
	GCI4.0: future government value orientation	0.608
	GCI4.0: stability government policy value	0.655		15.44***
	GCI4.0: value of social capital	0.971
	GCI4.0: impact value of terrorism	0.788		7.23***
Business dynamism			0.749		0.903	0.755
	GCI4.0: attitudes toward the value of business risk	0.746		3.17
	GCI4.0: Growth of innovative companies value	0.687		3.41
	GCI4.0: value of the insolvency recovery rate	0.955		1.50
Product market					0.852	0.537
	GCI4.0: competence in services value	0.657		1.82
	GCI4.0: complexity of tariffs value	0.755		1.59
	GCI4.0: efficiency of value dispatch process	0.756		2.66
	GCI4.0: degree of market value dominance	0.745		2.72
	GCI4.0: prevalence of nontariff barriers value	0.500^*		1.44
Labor market			1.000		0.988	0.977
	GCI4.0: value of active labor market policies	0.674		10.98***
	GCI4.0: ease of foreign labor recruitment value	0.865		10.98***
Skills			0.982		0.864	0.613
	GCI4.0: digital skills at people’s value	0.500^*		2.70
	GCI4.0: quality of professional training value	0.552		6.27
	GCI4.0: value of school life expectancy	0.952		1.11
	GCI4.0: graduate skill set value	0.514		6.67

Formative constructs	Construct indicators	External loads(> 0.5)	Convergent validity -redundancy analysis (> 0.7)	Collinearity(VIF < 5)	Composite reliability(> 0.7)	AVE(> 0.5)
Financial system			0.964		0.935	0.879
	GCI4.0: domestic credit to private sector value	0.827		2.35
	GCI4.0: value of market capitalization	0.993		2.35
ICT adoption			0.713		0.928	0.865
	GCI4.0: value of internet users	0.999		2.17
	GCI4.0: mobile-cellular telephony subscription value	0.701		2.17
Institutions			1.000		0.848	0.496**
	GCI4.0: value of budget transparency	0.512		1.32
	GCI4.0: effectiveness of the legal master in value adjustment regulation	0.400^*		9.65***
	GCI4.0: future government value orientation	0.608
	GCI4.0: stability government policy value	0.655		15.44***
	GCI4.0: value of social capital	0.971
	GCI4.0: impact value of terrorism	0.788		7.23***
Business dynamism			0.749		0.903	0.755
	GCI4.0: attitudes toward the value of business risk	0.746		3.17
	GCI4.0: Growth of innovative companies value	0.687		3.41
	GCI4.0: value of the insolvency recovery rate	0.955		1.50
Product market					0.852	0.537
	GCI4.0: competence in services value	0.657		1.82
	GCI4.0: complexity of tariffs value	0.755		1.59
	GCI4.0: efficiency of value dispatch process	0.756		2.66
	GCI4.0: degree of market value dominance	0.745		2.72
	GCI4.0: prevalence of nontariff barriers value	0.500^*		1.44
Labor market			1.000		0.988	0.977
	GCI4.0: value of active labor market policies	0.674		10.98***
	GCI4.0: ease of foreign labor recruitment value	0.865		10.98***
Skills			0.982		0.864	0.613
	GCI4.0: digital skills at people’s value	0.500^*		2.70
	GCI4.0: quality of professional training value	0.552		6.27
	GCI4.0: value of school life expectancy	0.952		1.11
	GCI4.0: graduate skill set value	0.514		6.67

Notes:

*Subthreshold external loads that were withheld to maintain model relevance; **the AVE of institutions was slightly below the threshold, but the construct was retained due to its relevance to the model;

***indicators with VIF above the thresholds that were maintained due to their importance in the model

Source: Table by authors

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