Roles of digitalization in the effect of entrepreneurial orientation on innovation in startups: mediator, moderator, capability?

Abstract Digitalization is imperative for a startup to be competitive, management consultants assert. Accordingly, many entrepreneurs found startups on the basis of digital technology. Many others, however, are not digitalizing. This raises a question for research, what are the roles of digitalization, specifically for turning an entrepreneur’s entrepreneurial orientation into innovation performance in the startup? A globally representative sample of 22,508 entrepreneurs was surveyed by the Global Entrepreneurship Monitor, reporting on digitalization and likely sources and consequences. The effect of an entrepreneur’s entrepreneurial orientation upon innovation performance in the startup is found to be moderated but not mediated by digitalization. As a distinct and separate capability, digitalization, alongside entrepreneurial orientation, is promoting innovation performance. Findings contribute to accounting for the roles of digitalization in startups.