The conclusion is likely to be noted with no more than academic interest in Scotland, where mergers have proceeded at a more leisurely pace.
A study commissioned by the CfBT Education Trust says that a college with a budget of pound;35 million is likely to have half a grade advantage in the four-point inspection system over one with a budget of pound;5million.
The conclusions contradict John Denham, the skills secretary in England, who questioned the desire for mergers at the Association of Colleges' conference last year, saying: "There is no evidence that larger colleges provide a more effective education."
Education consultants Adrian Perry and Mick Fletcher, the study's authors, examined the performance of 229 of England's colleges, which were inspected, and plotted it against their size.
They found that colleges had a clear advantage as they grew larger, with improvements being most marked between small and medium-sized ones. A group of small tertiary colleges was also scoring highly, but the authors said they mostly had the advantage of no local competition.
"It is striking that the three groups of colleges that do well - small tertiary, sixth-form colleges and very large - are all under pressure from current Government policies," the report said.
The study argues that establishing individual strong institutions is not enough, and that more needs to be done to create a coherent system, rather than pitting colleges and schools against one another in damaging competition.
Colleges which faced little or no competition were some of the best in the country, the study found. Four of the top seven inspection results came from tertiary colleges facing no competition.
Where two colleges provided distinct curriculum choices, such as between vocational provision and academic sixth form provision, they also tended to rate highly. Finally, very large institutions such as Newcastle College, Ealing, Hammersmith and West London College and City of Bristol College, which can dominate their local post-16 market, had notably good inspections, the study found.
Tony McAleavy, education director of the CfBT Education Trust, said: "Pressure on institutions to compete with each other, coupled with the absence of strong central leadership, has created a variety of incoherent systems in some local areas.
"While individual institutions in one area might be considered excellent, collectively they can fail to meet the needs of some young people. This is damaging to learners and particularly so to those lower down the ability range."