Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/213482
Authors: 
Kaufmann, Daniel
Renkin, Tobias
Year of Publication: 
2019
Series/Report no.: 
IRENE Working Paper No. 19-07
Abstract: 
We analyze export price adjustment of Swiss manufacturing firms using a novel data set of matched export, import, and domestic prices. After a large, unexpected, and permanent appreciation of the Swiss franc, export prices set in domestic currency fell less than export prices set in foreign currency. This difference prevails if we control for variation in firms' marginal cost. Through the lens of a structural model, this difference can be traced back to strategic complementarity in price setting for firms pricing in foreign currency. Meanwhile, firms setting prices in domestic currency exhibit no strategic complementarity and follow a constant markup-pricing rule.
Subjects: 
nominal exchange rate
border prices
currency choice
variable markups
pricing-to-market
price rigidity
exchange rate pass through
exchange rate sensitive factor costs
JEL: 
E3
E5
F3
F4
Document Type: 
Working Paper

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