IT Orientation Effects on Obstacles and Facilitators of Innovation: An Emerging Economy Perspective in Mexico

Innovation is a crucial determinant in the survival and growth of firms in emerging economies such as Mexico and other Latin American countries. These firms face obstacles in the form of institutional challenges and rigidity towards change. This study explores how two types of IT orientation to innovation –Internal IT Orientation to Innovation (IIOI) and External IT Orientation to Innovation (EIOI), help firms to overcome three types of obstacles to innovation typically prevalent in LATAM economies-economic, policy, and internal. We argue that IIOI has a mitigating role for internal obstacles, while EIOI enables firms to overcome policy and economic obstacles to innovation. We argue that IIOI complements economic facilitators, and EIOI complements policy facilitators to innovation. Using a unique dataset of Mexican firms, we provide support for our hypotheses. The results contribute to theory and practice by highlighting how specific IT orientations help overcome specific obstacles and complement specific facilitators.