Mediating and moderating mechanisms of the digital bridge between infrastructure and entrepreneurial performance

Digital infrastructure is widely acknowledged as a critical enabler of entrepreneurial activity; however, empirical evidence explaining how infrastructure translates into superior entrepreneurial performance remains fragmented. This study develops and tests an integrated model explaining the mediating and moderating mechanisms linking digital infrastructure quality to digital entrepreneurial performance. Drawing on the resource-based view, strategic change theory, dynamic capabilities theory, and institutional theory, we conceptualize digital infrastructure as a foundational resource whose performance implications depend on internal capability development, innovation orientation, and regulatory context. Using survey data collected from 300 digital ventures operating in the Middle East, we employ Partial Least Squares Structural Equation Modelling (PLS-SEM) with bootstrapping (5,000 resamples) to test direct, mediating, and moderating effects. Results show that digital entrepreneurial capabilities and innovation orientation partially mediate the relationship between infrastructure quality and performance. Innovation orientation emerges as the stronger mediating pathway. Regulatory support significantly moderates five structural relationships, amplifying the performance returns of both infrastructure and internal capabilities. By integrating resource-based, dynamic capability, and institutional perspectives within a single empirical model, the study extends existing research by demonstrating that infrastructure alone is insufficient for high entrepreneurial performance; rather, performance emerges from the interaction between technological readiness, organizational capabilities, innovation culture, and institutional support. The findings offer actionable insights for entrepreneurs and policymakers seeking to convert digital infrastructure investments into sustained competitive advantage.