Abstract

This paper explores institutional factors influencing the development of digital economy ecosystems, emphasizing the roles of regulatory frameworks, governance, and innovation. The paper uses institutional economics as a theoretical foundation and highlights how institutional arrangements shape digital infrastructure investment, digital adoption, and innovation capabilities among enterprises. This empirical research is based on unique data extracted from a sample of online survey questionnaires collected from 250 small and medium-sized enterprises in seven different Russian regions between January and March 2025, as well as an econometric model that uses this data. Our analysis demonstrates that institutional quality significantly influences digital adoption, along with investments in digital infrastructure and innovation outcomes through a proposed empirical framework and the regression modelling. The main outcomes of this work offer the extensive policy implications for enhancing institutional quality to foster sustainable digital economy ecosystems. As future research directions, we propose particularly longitudinal studies to assess the dynamic interactions over time. Our findings might be of a special importance for the relevant stakeholders and policymakers as well as for the entrepreneurs who are keen on participating and creating robust and sustainable digital economy ecosystems. © ?. ??????-??????, ?. ????????, ?. ????????, ?. ??????, 2025