Should we play an unfair game? The roles of regulatory effectiveness, government support and algorithmic bias in e-commerce entrepreneurial readiness

Purpose Indonesia is among Southeast Asia’s largest e-commerce markets, yet only about one-third of small businesses sell online. This gap not only creates opportunities for new entrepreneurs but also heightens concerns about perceived algorithmic bias. Against a backdrop of tightening regional data-privacy and social-commerce enforcement, the purpose of this study is to apply Algorithmic Justice Theory to examine how perceived regulatory effectiveness and government entrepreneurial support shape Indonesian youths’ readiness for e-commerce entrepreneurship. Design/methodology/approach A cross-sectional online survey of 281 Indonesia-based Millennial and Gen Z aspiring entrepreneurs was analyzed using partial least squares structural equation modeling in SmartPLS 4. Measurement reliability and validity were established, and mediation (government entrepreneurial support) and moderation (perceived algorithmic untrustworthiness) were tested via bias-corrected bootstrapping (5,000 resamples). Findings This study reveals that while perceived regulatory effectiveness establishes a foundation of trust, it does not directly drive e-commerce entrepreneurial readiness among youth. Instead, its effect is realized through government entrepreneurial support, which plays a crucial role in transforming regulatory trust into tangible engagement. Furthermore, when aspiring entrepreneurs perceive recommender systems as biased or unreliable, their reliance on government support intensifies, and they use it as a critical safeguard to navigate the challenges of platform-driven e-commerce. Practical implications The findings of this study offer valuable insights for governments and policymakers seeking to create a more inclusive and equitable digital entrepreneurial ecosystem. Originality/value This study advances Algorithmic Justice Theory to the context of platform-mediated entrepreneurship by conceptualizing enforcement visibility as a credibility signal that shapes perceived regulatory effectiveness. It specifies and tests a mechanism in which government entrepreneurial support converts regulatory trust into entrepreneurial readiness (mediation) and identifies perceived algorithmic untrustworthiness as a boundary condition that amplifies the value of such support (moderation). The framework reframes the debate from “more regulation” to “regulation-with-enablement,” clarifying when protective rules are most likely to translate into entrepreneurial readiness in emerging platform economies.