ABSTRACT
INTRODUCTION UK manufacturing industry is dominated by a small number of large firms.1 Not only are the dominant firms large but the trend has been towards larger units. Firms with over 10,000 workers accounted for 14 per cent of total manufacturing employment in 1935 and almost 40 per cent in 1968. At the same time, the reduction in the number of manufacturing firms from 140,000 in 1935 to under 60,000 in 1972 was almost entirely due to the fall in the number of small firms. Even so, small enterprises remain numerically important within the total population of firms. What determines the size of firms?
