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I'm not familiar with multilevel mediation per se, but in general group-mean centering results in a different model fit, because the parameters for the centered predictors give the within-group effect, which is distinct from the uncentered case. Grand-mean centering will change the intercepts, but not the overall model fit. In general, you would have to ...


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In the first model, the coefficient on $X_2$ (i.e., $b_3$) corresponds to the expected slope of $X_2$ on $Y$ when $X_1=0$. Omitting this term as in the second model is essentially forcing the coefficient on $X_2$ to be equal to zero. If that coefficient is indeed zero in the population, then there is no harm in setting it to zero, but typically researchers ...


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