Trade, Tariffs and Total Factor Productivity: The Case of Spanish Firms Dovis, Marion Milgram Baleix, Juliette TFP FIRM DATA Spain System-GMM Tariff The first author is grateful to the Femise project (FEM31-11) for providing financial support. The second author gratefully acknowledges financial support from the Spanish Ministry of Education and FEDER (CICYT Project SEJ2006-11067), Generalitat Valenciana (ACOMP07/102), Junta de Andalucía (SEJ 340 and SEJ.03261) and Femise project (FEM31-11). The aim of this paper is to examine the sensitivity of total factor productivity (TFP) to foreign competition in the case of a European country. Using the Olley and Pakes method, we calculate the TFP of Spanish manufacturing firms and study the impact of EU tariffs and the presence of foreign products and imports on TFP at the firm level. Applying the System-GMM method, we find that TFP is negatively impacted by European tariffs, whereas competition in the form of the increased presence of foreign products in the domestic market and firm imports leads to improvements in the TFP. Moreover, these two effects are complementary. We also find evidence of important asymmetries among firms depending on their involvement in foreign markets. 2024-07-15T10:08:56Z 2024-07-15T10:08:56Z 2009-03-20 journal article Dovis, Marion and Milgram-Baleix, Juliette, Trade, Tariffs and Total Factor Productivity: The Case of Spanish Firms. World Economy, Vol. 32, Issue 4, pp. 575-605, April 2009, https://doi.org/10.1111/j.1467-9701.2009.01169.x https://hdl.handle.net/10481/93122 10.1111/j.1467-9701.2009.01169.x eng http://creativecommons.org/licenses/by-nc-nd/4.0/ open access Attribution-NonCommercial-NoDerivatives 4.0 Internacional Wiley Online Library