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Exchange rate effects: A case study of the export performance of the Swiss agriculture and food sector
Author(s) -
Kohler Andreas,
Ferjani Ali
Publication year - 2018
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12611
Subject(s) - agriculture , exchange rate , economics , competition (biology) , panel data , food prices , financial crisis , international economics , agricultural economics , monetary economics , food security , international trade , macroeconomics , econometrics , geography , ecology , archaeology , biology
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.