Abstract
Digital technologies are commonly showed as reducing the costs of internationalisation and improving the capacity of firms to maintain foreign operations. However, foreign online market withdrawal continues to be prevalent. This paper investigates the conditions under which some digitally engaged firms maintain foreign operations, while others withdraw. We propose that digital intensity is both a force for extending foreign operations and a force for increasing organisational coordination costs. The stabilising role of digital intensity thus depends on the capability endowments of firms. Using UK firm-level microdata from the Office for National Statistics E-commerce Survey (2016-2019), we estimate discrete-time hazard models of foreign online market exit. We find that higher online sales intensity is related to a lower hazard of exit. However, this relationship is conditional: it is significantly stronger for firms with more advanced ICT capability, accumulated digital experience, and greater organisational scale. The results show that digital survival is not a function of intensity alone but rather the joint effect of digital intensity and organisational capability. By framing foreign online market exit as a capability threshold outcome, rather than simply the reverse of internationalisation, this paper contributes to the literature on digital internationalisation and firm survival.