This paper discusses Gelderblom’s hypothesis that urban competition (including a large number of competing cities, footloose foreign traders and municipal autonomy) was central to the rise of inclusive trade institutions in Europe. The first part discusses the precise behaviour of traders,...

(english) This paper shows that declining exporter-specific product heterogeneity can explain the nondecreasing distance elasticity of trade in 1963-2009. The paper first examines common explanations of the distance puzzle: sample and sectorial composition effects and the rise of FTAs. In the...