Many policy makers today take for granted that economic deregulation yields net benefits to industry, particularly with respect to helping improve productivity and efficiency. Certain structural issues about industrial deregulation are not well understood, including the impact of technical change or innovation. In this paper, we measure the extent to which innovation affected productivity within the Canadian for-hire trucking industry during deregulation. Using a unique data set spanning the trucking deregulation era in Canada, non-parametric Malmquist productivity indices are computed and de-composed. Results of the analysis indicate that the industry was affected by deregulation in a manner consistent with public policy goals.
