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Scholars stressed over the importance of entrepreneurial orientation and knowledge management for promoting innovation in the enterprises. SMEs, especially in the developing countries are afraid of innovating new products. This research focused particularly on SMEs operating in Jordan which is considered as a heaven for SMEs. The data has been collected with the help of an adopted questionnaires through simple random sampling. The framework has been developed using theoretical lenses of resource-based view, knowledge based view, and contingency theory. A structural equation modelling approach has been applied to test direct and indirect effects. The findings supported all the established relationships except the direct relationship between entrepreneurial orientation and product innovation performance. However, indirect effect of entrepreneurial orientation through open innovation is significant. The findings are highly relevant for the practitioners as they guide that product innovation performance is dependent on open innovation, only entrepreneurial orientation is insufficient. [ABSTRACT FROM AUTHOR]