Executive Summary
Since the new macroeconomic regime introduced in recent years, Argentina's industrial SMEs have played a prominent role based primarily on the significant growth observed and the investment process they began. However, the sector contains identifiable features of heterogeneity and dissimilar microeconomic performances can be distinguished. In this sense, the purpose of this research is to acknowledge the importance of innovative processes in business and the role assumed by knowledge, internal and external to firms. The task of the research is to test the hypothesis that firms which have carried out innovation activities in the past two years show a better business performance than those who did not innovate. Finally, the project proposes an empirical model developed from a methodology based on the use of moderating factors of firms' innovative behavior, which explain the hypothesis linking these behaviors to the context and structure of firms, the competitive performance, the resources and capabilities of firms, and their relationship with the environment. The obtained results show that firms with innovative behavior in generating both internal and external knowledge are those with better competitive performance.