The efect of ICT and higher‑order capabilities on the performance of Ibero‑American SMEs

Abstract

Information and communication technologies (ICT) has the ability to create value by enabling other frm capabilities. Based on the ICT-enabled capabilities perspective, this study explores the direct and indirect efects between lower- and higher-order capabilities, such as ICT, knowledge management capability (KM) and product innovation fexibility (PIF), on the performance of Ibero-American small- and medium-sized enterprises (SMEs). This paper uses second-order structural equation models to test the research hypotheses with a sample of 130 Ibero-American SMEs. The results contribute to flling the gap in the SME-focused literature on empirical studies examining ICT-enabled capabilities and frm performance. The results show an enabling efect of ICT on higher-order capabilities, such as KM and PIF, which, by acting as mediating variables, create value and improve performance through innovation in frms.