The deregulation of the trucking industry in the US began in 1978 and was completed in 1980. This study tests for economies of scale and productive efficiency in the trucking industry. Results indicate constant returns to scale in the trucking industry for both pre- and post-deregulation periods. Gains from mergers are likely to be moderate.

The paper argues that output characteristics are positively correlated with, and influenced by, firm size. When firm size increases, output characteristics also change in a direction that reduces unit costs. Drawing on evidence from the US trucking industry, an appropriate specification indicates that economies of scale may well exist.

This paper reports on the estimation of a cost function using pooled data for major US railroads for the period of 1974-86. Analysis is performed of short and long-run returns to scale, the extent of capital disequilibrium, and the adjustments to capital in the heavily regulated and quasi-regulated environments before and after the passage of the Staggers Act in 1980. It is found that there is considerable overcapitalisation in the rail industry and that this has persisted in spite of the Act.