Perceived environmental uncertainty: validation of a measure from the accounting literature
Harrison, JL 2003, 'Perceived environmental uncertainty: validation of a measure from the accounting literature', Australasian Journal of Business and Social Inquiry, vol. 1, no. 3, pp. 116-130.
Responding to calls for assessment of perceived environmental uncertainty (PEU) measures, this paper applies confirmatory factor analysis in the validation of a frequently applied measure of PEU from the accounting literature. Initial results indicated that the hypothesised measurement model did not fit the data. Two alternative models were then tested and the final selected model was found to be multidimensional and to reflect both market and institutional uncertainty. This model also satisfied criteria for reliability and convergent, discriminant and predictive validity. Several improvements and extensions are suggested in subsequent discussion and it is argued that these need to be integrated into future research.