As Velocophile says, bigger means more space for larger main springs and bigger balances. Bigger balance means more inertia which means more immunity to shock and more stability of oscillation (higher Q). Locking/unlocking forces can be higher which also adds to stability.
Larger components means that tolerances are less of an issue and that manufacturing, assembly and repair are easier and can be more precise.
I'm not sure there's an upper limit. The observatory competitions had categories for marine chronometers, deck or pocket chronometers. The original categoiry A was for pocketwatches 43-70mm in diameter, and the category D for wristwatch movements 300mm in diameter only appeared in 1943. You can argue that a marine chronometer is not quite the same because it uses a different escapement that's not suitable for a watch (modern AP version of the Robin excepted), but marine chronometer-sized movement with an anchor escapement will always have the edge of a wristwatch movement.
I feel like being contentious (for a change

) and stating that a wrist watch movement will never attain the performance that a large pocketwatch movement can get to
if the same technologies are used.
nick