Analysis on Determinant Factors of Local Government Expenditure with Panel Data Ridge Regression (in Korean)

Seung-Jun Park () and Dae Chul Kim ()
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Seung-Jun Park: Department of Economics, Daegu University
Dae Chul Kim: Daegu Gyeongbuk Development Institute

Economic Analysis (Quarterly), 2018, vol. 24, issue 1, 67-98

Abstract: The purpose of this study is to investigate the factors affecting the ratio of local governments expenditures based on 16 Korean state government panel data. Also, we employ ridge regression analysis to solve the multicollinearity problem caused by many explanatory variables. Socio-economic factors including real GRDP, population, etc and government factors like local officials are turned out to be statistically significant determining on the level of local government expenditure. However, political factors are not statistically significant in log real local government expenditure model. These results imply that local governments should consider all the socio-economic, political and government factors to accurately identify the financial expenditure levels of them and need to establish the corresponding public policies.

Keywords: Local government expenditure; Ridge regression; Korea state government; Local fiscal policy (search for similar items in EconPapers)
JEL-codes: C2 H3 H7 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bok:journl:v:24:y:2018:i:1:p:67-98

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