I would like to find out if there is any impact of social media on the creation of entrepreneurial opportunity. I have two groups (Online business entrpreneurs and traditional business entrepreneurs) and 20 statements in total that I have measured using 5 point likert scale (strongly agree, agree, neutral, disagree, strongly disagree and Not applicable(suggested by my Supervisor)). Those who run traditional business chose "not applicable" for 8 items and I have ignored those 8 items and proceed with rest of the 12 items for further analysis e.g. Mann-Whitney U test, Kruskal-Walis test and correlation analysis.
Now I have 3 questions:
1. Is it okay to ignore those items having "not applicable"?
2. I have tried exploratory factor analysis for both groups and got 3 factors for each, however, one factor among them has only two items under it. Is two items under a factor acceptable?
3. What other tests or analysis I can do other than the above mentioned tests?
In essence, you are treating Not Applicable as missing data by omitting all respondents who give this response. That is quite appropriate.
Yes, you can have a two-item factor. I recommend EFA with a principal factors extraction and an oblique rotation for correlated factors.
You could do correlations or possibly t-tests. If the items related to your factors serve as either independent or dependent variables, then you could do regressions.
Now we know what ChatGPT has to say. As for requiring 3 items for a factor to be "reliable," the issue is more the identification of the factor loadings. With only two items, the loadings should both be equal to the square root of the correlation between the items. Whether that factor is reliable depends more on the magnitude of the correlation rather than number of items.
@David L Morgan Thank you for your response. I tried factor analysis according to your suggestion and found out 3 factors. One factor having 5 items but having both positive and negative statements. For example:
1. It is easier to spread information via socia media.
2. It is easier to promote products via social media.
3. It is less costly to run business via social media.
4. It is tough to protect customers personal information due to cyber-attacks.
I thought of naming the factor as "Perceived advantages of Social Media", however, the 4th item seems negative to me. Is there any suggestion from your side to solve this??
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