Publication type: Working paper – expertise – study
Title: Exchange rate fluctuations and quality composition of exports : evidence from Swiss product-level data
Authors: Fauceglia, Dario
Plaschnick, Björn
Maurer, Maria Rueda
Extent: 39
Issue Date: 2017
Series: Strukturberichterstattung
Series volume: 56/2
Publisher / Ed. Institution: Staatssekretariat für Wirtschaft
Publisher / Ed. Institution: Bern
ISBN: 978-3-905967-35-7
Language: English
Subjects: Aggregate export; Exchange rate; Quality
Subject (DDC): 338: Production
Abstract: This paper studies the relationship between exchange rate movements and the average export quality using disaggregated Swiss product-level data between 1996 and 2015. We find evidence at different levels of aggregation that the average export quality increases in response to a currency appreciation. This exchange rate effect on quality is more pronounces for differentiated goods and in sectory with a greater scope for quality differentiation. We also find empirical support for a compositional effect: Currency appreciations shift market chares towards goods that are more expensive and of higher quality. From a policy perspective, this reallocation effect points to the importance of facilitating structural changes in the export composition to increase the resilience of the export sector to exchange rate shocks. Our results also suggest a positive relationship between the average export quality and aggregate export sales. Form a methodological point of view, the findings imply that exchange rate pass-through estimations without quality controls tend to be biased regardless of aggregation level or type of data.
License (according to publishing contract): Licence according to publishing contract
Departement: School of Management and Law
Organisational Unit: Center for Economic Policy (FWP)
Appears in collections:Publikationen School of Management and Law

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