ABSTRACT
The proposition that the immense size of a few nineteenth century firms and many twentieth century firms is intertwined with developments in accounting may go unopposed. A review of the economics literature on size, or scale, provides a good base for thinking about the influence of large size on firm accounting. Issues relating to the size of firm long have interested economists, but perhaps not as long as some other matters. Textbooks in the neoclassical tradition and Stigler and modern books have routinely analyzed economies and diseconomies of scale. The ability of large firms to influence others to their own advantage is not limited to competitors. Suppliers may offer lower prices or better service either on the basis of real cost savings or for other reasons. Customers and financial institutions may see advantages to dealing with large firms. The factors contributing to increasing returns to size present an impressive case for the efficiency of large plants and large firms.
