Drivers of innovation and competitiveness in small and medium-sized enterprises: a comprehensive analysis of the Latin American and Caribbean region

This study analyses the key drivers of innovation and competitiveness in small and medium-sized enterprises (SMEs) in Latin America and the Caribbean between 2006 and 2023. Using panel data regression (fixed and random effects) and machine learning models, the authors identify the most significant enablers of SME innovation. In addition, they find that political stability plays a positive role, while inflation and corruption significantly constrain performance. The study integrates classical innovation theory with emerging insights from Asian economies and highlights the role of political culture in shaping SME resilience.