This paper combines insights from the literature on the economics of organisation with traditional models of market structure to construct a theory of equilibrium firm size heterogeneity under the assumption of a homogenous product industry.

In a recent report (IC 1995a) the Industry Commission (IC) estimates that the implementation of the Hilmer Report and related reforms will yield a GDP gaim of around 5.4 per cent. In this paper, assumption are subject to a detailed critique. It is argued that most of the estimated productivity...