Digital Marketplace Participation as a Configurational Capability System: Evidence from Township Entrepreneurs in South Africa

Digital marketplaces are increasingly viewed as critical infrastructures for enabling inclusive entrepreneurial participation in developing economies. However, township entrepreneurs in South Africa continue to experience uneven and structurally constrained engagement despite widespread digital platform diffusion. This study examines Digital Marketplace Participation (DMP) as a configurational capability system shaped by the interaction of technological embedding and structural conversion conditions. Drawing on Domestication Theory and the Capability Approach, the study conceptualises DMP as a multidimensional construct comprising engagement intensity, transactional participation, market reach expansion, platform integration, and customer responsiveness. The explanatory framework integrates platform design and digital literacy (domestication conditions) with affordability, agency, and access to resources (capability conditions). A quantitative cross-sectional design was employed, using survey data collected from 152 township SME owner-managers in the Ngaka Modiri Molema District Municipality, South Africa. Canonical Correlation Analysis (CCA) was used to examine the multivariate relationship between the predictor system and the multidimensional participation outcome system. The results indicate a strong and statistically significant canonical relationship (Rc = 0.81), explaining 66% of shared variance, while redundancy analysis shows that 46% of variance in DMP is explained by the predictor system. Findings confirm that digital marketplace participation is not driven by isolated variables but emerges from an interdependent configurational system of platform and capability conditions. The study contributes to digital entrepreneurship literature by advancing a configurational capability perspective that integrates technological embedding and structural conversion processes to explain heterogeneous participation outcomes in resource-constrained contexts.