Abstract

Purpose – This study aims to examine how digital resources, digitalization strategies and organizational barriers interact to influence the innovation performance of small and medium-sized manufacturing enterprises (SMEs) in Ibero-America. Design/methodology/approach – The proposed model is grounded in the resource-based view (RBV) and dynamic capabilities theory. A quantitative approach was applied using partial least squares structural equation modeling on a representative sample of 3, 733 SMEs, using data from the Ibero-American Observatory of SMEs. The model incorporates direct and mediated relationships, as well as robustness analyses. Findings – The results show that digitalization strategies significantly mediate the relationship between digital resources and innovation performance. Likewise, barriers to digitalization negatively affect both the availability of resources and strategic formulation. Moreover, digital resources do not have a direct impact on innovation performance, which supports the digitalization paradox, whereby investing in technology does not necessarily guarantee improved innovation outcomes. Originality/value – This study offers an integrative relational framework that goes beyond fragmented approaches by jointly assessing the effects of resources, capabilities and barriers on innovation in SMEs from emerging economies. The theoretical contribution is complemented by context-specific evidence from Latin America. © 2026 Emerald Publishing Limited