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Focusing on the firm and scale: the case of university and college business firms. 2 have been passed over by the literature on scale effects in business firms.3, 4 On the contrary, scale-specific data are routinely collected by many firms and the literature has emerged to address some of the issues surrounding their analysis. The main objective of this paper is to review some of the relevant literature on firms of different sizes and to assess the extent to which we have applied the findings of this literature to the analysis of firm and university / college level. Data Analysis Data on the size of firms in Canada are collected by Statistics Canada in the National Accounts in the Industrial Component.5 Universities are classified according to the Carnegie Classification of Institutions of Higher Education.6 The Survey of Current Business includes questionnaires sent to members of the Canadian Institute of Business Administration (CIBA) in 2004, 2005, and 2006. The surveys are sent in advance of each issue of the Survey of Current Business. Additional data are collected by Statistics Canada in the Survey of Household Spending, which is sent in November of each year.7 About two years are required to conduct a survey of both major and minor business firms, university / college business firms, and households. 2.1 Data Description and Instrumentation This paper combines two data sets, the Survey of Current Business, and the National Accounts. It is based on a sample of business firms, and of higher education institutions in Canada. The data was collected in the period January 2003 to June 2005. The survey includes about 25,000 business firms, 4,000 of which are university / college business firms. Moreover, the data includes a random sample of about 25,000 households in Canada. 8 As with the other surveys of business firms and households, the Survey of Current Business includes the information needed to calculate the national accounts of a business firm. The firm’s size is measured in two ways. First, the number of employees is a count of all employees, including full-time, part-time, and temporary employees. Second, the number of employees is a count of permanent employees. The total annual sales for the firms are measured in two ways. The first is the total amount of money received from clients during the reference period. Second, the firms also report their revenues from selling their products and services to others. The average wage is measured in two ways. First, the average wage of all employees. Second, the average wage of permanent employees. The income before taxes (before income taxes) is the total income

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