Internationalization and firm default risk: The roles of environmental dynamism and marketing capability

Internationalization's role on firm performance has captured massive research attention. However, its influence on firms' default risk, an important firm outcome that not only reflects the backward-looking firm managerial effectiveness but also signifies the forward-looking willingness-to-support from key stakeholders such as debt holders, is not found in the literature. This current research is developed to fill this important theoretical gap by formulating a moderating model that simultaneously incorporates internationalization, environmental dynamism, and marketing capability towards their dynamic joint effects on global firms' default vulnerability, and thus it generates more detailed and realistic images of internationalization under the influences of concurrent internal and external contingency factors. Our results show that high marketing capability assists firms that have a high degree of global expansion to reduce default risk. In addition, environmental dynamism can be either a facilitator or hindrance for internationalization's risk reduction, depending on firm capability levels.