<p>This study uses a firm-level data panel for Mexico, with information never used for research before, in order to assess how IT use influences firm performance. Further, we explore if, in the context of raising competition from China, this effect is different for firms more strongly affected by competition where incentives for upgrading and innovation may be more intense. In this perspective, we analyze the complementarity between IT and competition, taking advantage of the exogenous shock generated by Chinese competition. The results indicate that IT use has higher effects over productivity in the case of firms facing higher competition from China both in the domestic market and in the US market. Furthermore, once we take into consideration the complementarity between these two factors, neither of them increases productivity taken separately.</p>