Exchange rate effects: A case study of the export performance of the Swiss agriculture and food sector. (17th January 2018)

• Record Type: Journal Article
• Authors: Kohler, Andreas; Ferjani, Ali
• Is Part Of: World economy. Volume 41:Number 2(2018)
• Page Start: 494
• Page End: 518
• Publication Date: 2018-01-17
• Subjects: agriculture and food sector -- exchange rate -- exports -- panel data models -- time series analysis; International economic relations -- Periodicals; 330
• DOI: 10.1111/twec.12611
• Languages: English
• ISSNs: 0378-5920

Abstract

Abstract: The Swiss franc appreciated strongly against the currencies of Switzerland's most important trading partners after the global financial crisis in 2008. This has raised the question of how sensitive Swiss exports are with respect to exchange rate movements. We analyse this question for exports of the Swiss agriculture and food sector, using both time series and dynamic panel data models based on data from 1999 to 2012. We find that in the long run a one per cent appreciation of the Swiss franc leads on average to a decrease in exports of agricultural and food products between 0.8 and 0.9 per cent. Our results suggest that on average, producers in the Swiss agriculture and food sector are able to successfully avoid price competition by differentiating their products, producing high‐quality products for niche markets.