Degree of internationalization and financial performance of gaming businesses: A study of CD Projekt capital group

Abstract

Objective: This article aims to evaluate the impact of the internationalization process of firms on their financial situation. Through the research process presented in this study, I verify whether financial analysis can have its legitimate application in assessing the internationalization of a firm in the gaming industry. This verification is done on the example of the CD Projekt capital group. The process of scientific reasoning in this paper will bring closer to the fulfilment of the main research objective – to answer the question about the desirability of applying ratio analysis in the research domain of internationalization of firms.

Research Design & Methods: This paper applies an indicator analysis. Over the years of development of this analysis, researchers separated, measured, and formed the four most essential elements of its financial functioning to enable their evaluation. Using the literature on the subject, calculating tools and my knowledge, I independently prepared and developed eleven indicators that constitute the foundation of the research process presented in this article. The indicators will verify the hypotheses posed through calculations and interpretation of correlation coefficients between variables.

Findings: The effect of partial or complete confirmation of the hypotheses adopted in the introduction is to confirm that the company’s internationalisation in the gaming industry has a positive impact on its financial condition. The result of the study is also the conclusion that the company’s internationalisation has had a positive impact on almost every aspect of the CD Projekt capital group’s operations and its current position is directly attributable to the internationalization process.

Implications & Recommendations: To simplify the analysis, topic has been reduced to the example of a company in the gaming industry. I note, however, that the indicator analysis also seems to be a tool to assess the process of internationalization within other separate industries or sectors and therefore recommends further study of the issue.

Contribution & Value Added: The use of indicator analysis in the research domain of the internationalization of enterprises has been the subject of scientific studies for some time. However, the attempt to implement the issue in the specificity of the creative industry is, according to the state of the author’s knowledge, a kind of novelty. This work aimed to assess the impact of the internationalization process of a company in the gaming industry on its financial position. This goal was achieved, which confirms, following the principle of deductive reasoning, that assessing the impact of the internationalization process of the company based on indicator analysis retains economic sense.

Keywords

indicatior analysis, internationalization of firms, financial performance, international business, gaming business, creative corporate finance

Author Biography

Sławomir Szwajkosz

Bachelor in international economics, specialized in international trade from Cracow University of Economics (Poland, 2021). Currently a master student of financial markets as well as international trade at the same university.

References

1. Ahroni, Y. (1966). The Foreign Investment Decision Process. Boston: Division of Reaserch, Graduate School of Business Administration.
2. Barłożewski, K., & Trąpczyński, P. (2021). Internationalisation motives and the multinationality-performance relationship: The case of Polish firms. Entrepreneurial Business and Economics Review, 9(2), 85-104. https://doi.org/10.15678/EBER.2021.090206
3. Chalmers, D., Manetta, E.,& Sensini, L. (2020). R&D and internationalization: Efect on the Performance of SMEs. International Journal of Advances in Management and Economics, 9(3), 39-48. https://doi.org/10.31270/IJAME/v09/i03/2020/5
4. Cushman & Wakefield LLP (2016). Where in the world: Business processoutsourcing and share service location index 2016. QBusiness.pl. Retrieved from https://www.qbusiness.pl/uploads/Raporty/cwbpo2016.pdf
5. Daniels, J.D., & Bracker, J. (1989). Profit performance: Do foreign operations make a difference? Management International Review, 1(29), 46-56.
6. Gabrusewicz, W. (2014). Analiza finansowa przedsiębiorstwa. Teoria i zastosowanie.Warszawa: PWE.
7. Geringer, J.M., Beamish, P.W.,& DaCosta, R.C. (1989). Diversification strategy and internationalization: Implications for MNE performance. Strategic Management Journal, 2(10), 10-19. https://doi.org/10.1002/smj.4250100202
8. Global Enterpreneurship Monitor (2021). 2020/2021 Global Report. London: Global Enterpreneurship Research Association.
9. Gomes, L., & Ramaswamy, K. (1999). An empirical examination of the form of the Relationship beteen multinationality and performance. Journal of International Business Studies, 1(30), 173-188. https://doi.org/10.1057/palgrave.jibs.8490065
10. Graham, B., &Dodd, D. (2009). Security Analysis. New York: Mc Graw Hill.
11. Grant, R.M. (1987). Multinationality and performance among British manufacturing companies. Journal of International Business Studies, 3(18), 79-89. https://doi.org/10.1057/palgrave.jibs.8490413
12. Horrigan, J.O. (1968). A Short Story of Financial Ratio Analysis. The Accounting Review,2(43), 284-294. https://www.jstor.org/stable/243765
13. Jung, J.,& Bansal, P. (2009). How Firm Performance Affects Internationalization. Management International Review, 6(49), 711. https://doi.org/10.1007/s11575-009-0014-7
14. Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decisions under Risk. Econometrica, 2(47), 263-292. https://doi.org/10.2307/1914185
15. Ketels, Ch. (2016). Review of Competitiveness Frameworks: An Analysis Conducted for the National Competitiveness Council. Dublin: National Cometitiveness Council.
16. López-Morales, J.,& Gómez-Casas, M. (2015). Degree of Internationalization (DOI) and Performance Relationship: An Empirical and Conceptual Approach. International Journal of Academic Reaserch in Business and Social Sciences, 4(9), 39-56. http://dx.doi.org/10.6007/IJARBSS/v4-i9/1128
17. Maciejewski, M., & Głodowska, A. (2020). Economic development versus the growing importance of the financial sector: Global insight. International Entrepreneurship Review, 6(3), 77-90. https://doi.org/10.15678/IER.2020.0603.06
18. Moscviciov, L., Batrancea, M., Batrancea, I., & Batrancea, A. (2010). Financial ratio analysis used in the enterprises. Annals of the University of Oradea: Economic Science, 2(1), 600-603.
19. Mukaka, M.M. (2012). Statistic Corner: A guide to appropriate use of Correlation coefficient in medical reaserch. Malwi Medical Journal, 24(3), 69-71.
20. Ruigrok, W., & Wagner, H. (2003). Internationalization and Performance: An Organizational Learning. Perspective. Management International Review, 43(1), 63-83.
21. Rymarczyk, J. (2020). Technologies, Opportunities and Challenges of the Industrial Revolution 4.0: Theoretical Considerations. Entrepreneurial Business and Economics Review, 8(1), 185-198. https://doi.org/10.15678/EBER.2020.080110
22. Siddharthan, N.S., & Lall, S. (1982). Recent growth of the largest U.S. multinationals. Oxford Bulletin of Economis and Statistics, 1(44), 1-13. https://doi.org/10.1111/j.1468-0084.1982.mp44001001.x
23. Steinbruch, F., Nunes, M., & Nascimento, L. (2020). Companies’ performance on the internationalization process. Revista Pensamento Contemporâneoem Administração, 14(1), 34-55. https://doi.org/10.12712/rpca.v14i1.38441
24. Tallman, S., & Li, J. (1996). Effects of International Diversity and Product Diversity on the Performance of Multinational Firms. The Academy of Management Journal, 39(1),179-196.
25. Trąpczyński, P., & Halaszovich, T. (2021). Exploitation-exploration balance and its performance outcomes: A study of FDI portfolio decisions of new multinational. Entrepreneurial Business and Economics Review, 9(4), 115-129. https://doi.org/10.15678/EBER.2021.090408
26. UCTAD (2007). The Diverse of the Largest Transmnational Corporations.New York and Geneva: United Nations.
27. Wach, K. (2016). Innovative Behaviour of High-Tech Internationalized Firms: Survey Results from Poland. Entrepreneurial Business and Economics Review, 4(3), 153-165. https://doi.org/10.15678/EBER.2016.040311
28. Wach, K. (2017). Exploring the Role of Ownership in International Entrepreneurship: How does Ownership Affect Internationalisation of Polish Firms? Entrepreneurial Business and Economics Review, 5(4), 205-224. https://doi.org/10.15678/EBER.2017.050410
29. Wach, K. (2021). The evolution of the Uppsala model: Towards non-linearity of internationalization of firms. International Entrepreneurship Review, 7(2), 7-19. https://doi.org/10.15678/IER.2021.0702.01