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Title: Backward participation in global value chains and exchange rate driven adjustments of Swiss exports
Authors : Fauceglia, Dario
Lassmann, Andrea
Shingal, Anirudh
Wermelinger, Martin
Published in : Review of world economics
Volume(Issue) : 154
Issue : 3
Pages : 537
Pages to: 584
Publisher / Ed. Institution : Springer
Issue Date: 2018
License (according to publishing contract) : Licence according to publishing contract
Type of review: Peer review (Publication)
Language : English
Subjects : Global value chain; Gravity equation; International trade
Subject (DDC) : 337: International economics and commerce
Abstract: Abstract This paper examines the effect of exchange rate movements on export volume, export revenues and propensity to export taking into account the extent of foreign value added content of exports (“backward integration”) in global value chains (GVCs). Using both product-level and firm-level panel data, our results suggest that Swiss exports (intensive margin) and the export probability (extensive margin) are negatively affected by a currency appreciation. However, this adverse effect is mitigated in sectors and firms that are more integrated in GVCs, which could be explained by the “natural hedging” of exchange rate movements. Our findings are robust to the use of different measures of natural hedging and GVC integration and also hold across various specifications and estimation methods that control for sample selection, firm heterogeneity, heteroskedastic errors and persistence in export behavior. The dynamic specifications also reveal that export hysteresis driven by a currency appreciation is a concern particularly for firms that are not established in export markets.
Further description : Erworben im Rahmen der Schweizer Nationallizenzen (
Departement: School of Management and Law
Organisational Unit: Center for Economic Policy (FWP)
Publication type: Article in scientific Journal
DOI : 10.1007/s10290-018-0310-z
ISSN: 1610-2878
Restricted until : 2023-08-01
Appears in Collections:Publikationen School of Management and Law

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