The Impact of Changes in the Value of the Krona on Swedish Exports: An Empirical Study on the Industry Level

Abstract: The impact of changes in the value of the krona on Swedish trade at the aggregated level has been well covered in empirical research papers over the years. The findings stemming from these papers have been highly mixed, showing no unambiguous support for the assumption that if the krona weakens, Swedish exports increase. In this thesis, we investigate this matter with the use of a more recent and less investigated approach, where data is disaggregated down to the industry level. By applying first differenced regressions on export data from Sweden’s 20 largest export industries, we find no evidence for the existence of a systematic relationship between the strength of the krona and these industries’ export volumes. Furthermore, we can conclude that the impact of the krona on exports has undergone two changes since the year 2000: it has become less immediate, and its effect on the service sector has weakened.