Nature said on Thursday that such black holes may also provide the link between two other types of the phenomenon.
Likely to be formed in dense star clusters, medium-sized black holes could prove the existence of stellar-mass black holes and supermassive ones that reside in galaxy centres.
Stellar-mass black holes are between two and 10 times the Sun's mass, while supermassive ones are between a million and a billion times the Sun's mass.
Collisions between stars in the flattened disc of spiral galaxies are very unlikely because the spaces in between the stars are so great.
Stellar collisions are more likely to occur in clusters of new stars, where the more massive ones sink in towards the cluster's core, collide and merge.
Simon Portegies Zwart, of the University of Amsterdam, Netherlands, and colleagues ran computer simulations using MGG 11 galaxy as their model.
"The result is tantalising - this could well be how the building blocks of supermassive black holes formed"
University of California
They demonstrated that repeated collisions between stars could produce a so-called "runaway star" with increasing mass.
Once those stars exceed 260 solar masses, they collapsed to form black holes without a significant loss of their mass.
The researchers believe that this process may produce medium-sized black holes of between about 100 and 1,000 solar masses.
Some also believe it could provide a foundation for the formation of supermassive black holes.
"The result is tantalising - this could well be how the building blocks of supermassive black holes formed," says Nate McCrady, from the University of California at Berkeley, US.