Big business does not overly dominate the Australian economic landscape despite popular belief.
That's the finding of a new Grattan Institute analysis, countering arguments that large firms are dominating markets, pushing up prices and profits, squeezing suppliers and slowing growth in wages and productivity.
While there are a few sectors of big company concentration, they are no worse than other economies of Australia's size, the report says.
A few large sectors such as banking have become more concentrated, while others, such as supermarkets, have become less so.
In a few sectors, such as the media, "once-mighty" companies have been disrupted by new, online competitors.
The institute's productivity growth program director, Jim Minifie, says the power of big firms has not grown much either with profit rates hardly budging in 25 years.
"The big end of town is not bigger than it was in the 1990s," Dr Minifie said.
He believes competition law is working reasonably well, with regulators having been handed more tools from the recent Harper review.
However, he thinks regulators could squeeze some monopolies more tightly because competition alone cannot do the job, and governments can make it easier for consumers to compare and switch service providers.
Red tape also hits smaller firms harder so streamlining regulation can improve competition.
"Australia may not be the haven for oligopolies that many believe it to be but governments can still do much more to tighten the screws on natural monopolies," Dr Minifie said.
