Grinding Gears, Groaning Growth Innovation Input Factor Disparities in the EU
Krenzer, Henry L.M.
Krenzer, Henry L.M.
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Abstract
Since the Eurocrisis, EU productivity is lagging behind compared its previous performance but also to the U.S. In his report, Mario Draghi diagnoses a wide disparity in innovation and education investments amongst member states as one of the causes for this productivity puzzle. The main objective of this paper is to assess whether a common set of input factors can reliably account for productivity across EU countries, or if national differences warrant tailored policy approaches. To do so, this paper uses multiple regression models (linear, quadratic, log-linear) on panel data from 2012 to 2023 to develop separate models for innovation and education factors. Then, it will interpret country-specific coefficients and t-scores to compare them, finding strong differences in both impact and relevance of input factors like R&D, infrastructure, and educational quality along different fault lines. Additionally, diminishing returns and skill mismatches reduce the effectiveness in some countries. Drawing on the idea that a blanket EU investment policy is inefficient, this paper offers some policy proposals to transition to performance-based, regionally flexible models emphasizing comparative advantage.
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Thesis (B.A. in International Affairs)--John Cabot University, Spring 2025.
Date
2025
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Keywords
Europe, Economic conditions, Regional disparities
Citation
Krenzer, Henry L.M. "Grinding Gears, Groaning Growth Innovation Input Factor Disparities in the EU". BA Thesis, John Cabot University, Rome, Italy. 2025.