Abstract for: Expansion Economies: The Growth of the Firm through its Globalization

Using the tools of system dynamics and urn theory, this paper formalizes the theory of expansion economies to explain the globalization of the firms. In order to exploit economies of expansion, manufacturing firms tend to expand their economic activities to different locations, regions and countries. As firmsí expansion process is an increasing return mechanism, system dynamics and urn theory can explain path dependence and self-organizing size distribution of global firms.