This study evaluated the relationship between information technology (IT) and competitiveness (CP), emphasizing the different dimensions of IT capabilities, including customer relationship management (CRM) and human resource management (HRM). Also, the mediating role of innovative performance (IP) was examined in the link between IT use and CP. Data were collected in 2023 through a standard questionnaire, whose validity and reliability were confirmed by experts and statistical tests. Then, 172 valid responses were analyzed after determining the minimum sample size using Cochran’s formula. SPSS version 25 was used for descriptive analyses and preliminary tests, while SmartPLS 3.3.3 was utilized for structural equation modeling and hypothesis testing. The findings indicated that the use of IT components enhances CP, and IP mediates this relationship. This research contributes to the theoretical development of innovation management and IT by highlighting the transmission mechanism of IP rather than focusing solely on the direct relationship. This study, conducted among Iranian small and medium-sized enterprises (SMEs), also fills a gap in global literature, especially in developing countries, and offers practical insights.

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