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A theory suggesting a measure of environmental exposure that combines a firm's composition and toxicity of emissions, it's size and pollution intensity, and it's location determining the size of the population at risk, is presented. The results from emission-level regressions suggest the possibility that regulatory threat may be present, but that the identification assumption may be incorrect and it is found that green regulatory threat is not very effective in reducing emissions.

Do scale economies help to explain international trade flows? Using a large database on output, trade flows, and factor endowments, we find that allowing for the presence of increasing returns to scale in production significantly increases our ability to predict international trade flows. In particular, using trade data, we find that a third of all goods-producing industries are characterized by increasing returns to scale. Thus, scale economies are a quantifiable and important source of comparative advantage. (JEL F11, F12, D2)

This paper investigates how openness to international goods markets affects pollution concentrations. We develop a theoretical model to divide trade's impact on pollution into scale, technique, and composition effects and then examine this theory using data on sulfur dioxide concentrations. We find international trade creates relatively small changes in pollution concentrations when it alters the composition of national output. Estimates of the trade-induced technique and scale effects imply a net reduction in pollution from these sources. Combining our estimates of all three effects yields a somewhat surprising conclusion: freer trade appears to be good for the environment. (JEL F11, Q25)