Trade Cost Uncertainty and Firm Expectations

This project investigates how Swiss firms respond to hypothetical changes in trade relations between Switzerland and the European Union. The central question is how anticipated increases in trade costs, and uncertainty surrounding those increases, affect firms’ short-term expectations, particularly regarding turnover, selling prices and sales to the EU. The data are collected through a voluntary supplementary module included in a regular KOF business survey. Participants first answer questions about the shares of their firm’s revenue generated across different sales markets. They may then choose whether to answer additional questions on an economic policy topic. Firms that agree to participate are presented with a hypothetical scenario involving possible additional costs of trade between Switzerland and the EU. Firms are randomly assigned to scenarios that differ in whether the future cost increase is presented as more or less uncertain. They are then asked how key business outcomes would develop over the following four months relative to a continuation of the current situation. Finally, they are asked how long it typically takes for them to be able to change prices for customers in the E.U.

2026-07-01

2026-07-31

1) Proportion of firm's total turnover for different export markets (i.e. for the E.U., USA, China, remaining export markets, domestic sales)
2) Expected change in total firm turnover
3) Expected change in firm's selling prices to the E.U.
4) Expected change in firm turnover from goods or services sold in the E.U.
5) Firm's price-setting horizon for E.U. customers.

For variables 2,3 and 4 the outcome is both numerical and categorical (e.g. "higher", "the same", "lower").

The study examines the extent to which expectations and uncertainty regarding the costs per unit sold influence the pricing and sales plans of Swiss firms. We use the survey results to calibrate a trade model.

Not available

Randomization is done automatically by a computer.

The randomization is done at the firm (i.e. respondent) level. Each firm in our online panel is assigned one of the three vignettes.

No

We expect between 2000 and 4800 firms to answer our online survey and thus participate in the survey experiment.

We expect between 2000 and 4800 firms to answer our online survey and thus participate in the survey experiment.

As we have three treatment arms, we expect between 650 and 1600 firms by treatment arm.