We argue from a conceptual and empirical point of view that tax-rate elasticities of foreign direct investment (FDI) to Central and East European Countries (CEECs) derived from statutory tax rates (STRs) are likely to be flawed. STRs are problematic measures of tax burden as they capture neither tax base effects, nor effects of the home country or international and supranational tax laws. From an empirical point of view STRs are questionable as their behavior over time and between country-pairs may differ from that of the conceptually superior bilateral corporate effective average tax rates (BCEATRs) of the Devereux-Griffith type. The variability of host-country STRs and BCEATRs of seven major home countries of FDI in eight major CEEC host countries is compared via Levene-tests for 1995--2005. Results indicate that using STRs instead of BCEATRs in empirical investigations of FDI is likely to result in tax-rate elasticities which are too low in absolute value.

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Closing the prosperity gap between regions has always been a key political aspiration of the European Union – and cohesion policy is the primary means to achieve that goal. Europe is currently undergoing a digital and green transition that is drastically changing the way its economy works. How well prepared are regions to capitalise on the twin transition? What impact will it have on regional cohesion in Europe? We find that greening and digitalising the economy will likely widen the gap between rich and poor regions in the European Union.

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