Innovation performance in manufacturing SMEs: the influence of green management and digital orientation

This study examines the relationship between digital orientation, green management, and innovation performance in Latin American manufacturing SMEs. The data were collected between February and May 2022 by the Ibero-American SME Observatory (ISO), and the analysis employed partial least squares structural equation modeling (PLS-SEM), based on data from 4270 manufacturing SMEs in Latin America. The results showed that digital orientation is positively and significantly related to innovation performance, and that green management significantly and positively mediates that relationship. Nevertheless, the size of this mediating effect is relatively small compared to the direct effects. These findings are particularly relevant for manufacturing SMEs in emerging Latin American countries, which must confront modern challenges related to digitalization and environmental management while maintaining a market presence through valuable strategic capabilities, such as innovation. The results can also inform public policymakers.