In the context of this discussion, you would have to define "smaller engine" as less displacement, lower power output, lighter weight, or lower installed volume. Or, most likely, some combination of these four. Fuel economy is a very, very complex subject. All of the above can factor into the economy, along with compression ration, asperation, fuel delivery, exhaust system, accessories, lubrication, cooling system, fuel and grade, etc. And, that is just the engine.
Generally, the heavier the vehicle and the driver's foot, the poorer the economy.
