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This research analyzes the link between innovation and internationalization in a regional system of small traditional firms in the clothing and textile industry, with special attention given to the role played by the sources of innovation in driving export performance. The study shows a positive relationship between innovation and international growth. Moreover, the findings highlight the role of key partners as the major source of information for innovation, which drives export performance. The innovation model of exporting firms�as opposed both to the open innovation model based on external R&D collaborations, and to the classical internal R&D based one�depends mainly on external sources of knowledge, such as strong ties with some pivotal industrial and commercial partners. The viable system approach in firms' management is confirmed as the most appropriate one for fully exploiting the potential of interorganizational ties for innovation and internationalization.
