International expansion of an IT company : the effects of inflation and currency fluctuations on hiring and office-opening costs
Hautamäki, Miika (2026)
2026
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202604035615
https://urn.fi/URN:NBN:fi:amk-202604035615
Tiivistelmä
This thesis examines how inflation and currency fluctuations affect the hiring and office-opening costs of an IT company expanding abroad. The study focuses on the cost related challenges that arise during international expansion and explores how macroeconomic factors influence recruitment decisions, operational expenses, and financial planning. The theoretical framework draws on international economics and international business literature, particularly theories related to inflation and exchange rate volatility.
The research is based on a qualitative literature review combined with a comparative analysis of secondary data. Data were collected from publicly available and credible sources, including international statistical databases and institutional reports, and were analysed by comparing inflation trends, salary levels, office rental costs, cost of living ratios, and exchange rate developments across selected European countries. The analysis focuses on identifying patterns and relationships between macroeconomic conditions and cost structures relevant to international expansion.
The findings indicate that inflation primarily affects hiring costs through wage pressures, while exchange rate fluctuations contribute to uncertainty in budgeting and cost forecasting. Difference in salary levels and office rental costs suggest that expansion to lower-cost locations may offer financial advantages, although these benefits are sensitive to currency movements and inflation dynamics. The results also highlight that cost competitiveness depends on a combination of economic factors rather than a single cost component.
The study concludes that IT companies planning international expansion should adopt a holistic approach to cost evaluation, taking into account inflation, exchange rate risks, and operating expenses alongside strategic and long-term considerations.
The research is based on a qualitative literature review combined with a comparative analysis of secondary data. Data were collected from publicly available and credible sources, including international statistical databases and institutional reports, and were analysed by comparing inflation trends, salary levels, office rental costs, cost of living ratios, and exchange rate developments across selected European countries. The analysis focuses on identifying patterns and relationships between macroeconomic conditions and cost structures relevant to international expansion.
The findings indicate that inflation primarily affects hiring costs through wage pressures, while exchange rate fluctuations contribute to uncertainty in budgeting and cost forecasting. Difference in salary levels and office rental costs suggest that expansion to lower-cost locations may offer financial advantages, although these benefits are sensitive to currency movements and inflation dynamics. The results also highlight that cost competitiveness depends on a combination of economic factors rather than a single cost component.
The study concludes that IT companies planning international expansion should adopt a holistic approach to cost evaluation, taking into account inflation, exchange rate risks, and operating expenses alongside strategic and long-term considerations.