Purpose This paper aims to evaluate the relationship between external sources of knowledge and technological innovation and then analyze how technological innovation improves firm performance. Design/methodology/approach This study presents evidence based on a sample of 708 low-tech firms that participated in the National Survey of Innovation in the Manufacturing Industry and Knowledge-Intensive Service Firms (ENIIMSEC). A structural equation model approach was applied in this study. Findings There is a positive relationship between external sources of knowledge and technological innovation; technological innovation improves firm performance. Originality/value These results provide a deeper knowledge about how manufacturing firms in an emerging economy can apply open innovation practices to develop technological innovation, thus improving the firms' performance.