On the determinants of local government debt: Does one size fit all?

Maria Teresa Balaguer-Coll (), Diego Prior and Emili Tortosa-Ausina
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Maria Teresa Balaguer-Coll: Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain

No 2013/16, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: This paper analyzes the factors that directly influence levels of debt in Spanish local governments. Specifically, the main objective is to find out the extent to which indebtedness is originated by controllable factors that public managers can influence, or whether it hinges on other variables beyond managers’ control. The importance of this issue has intensified since the start of the crisis in 2007, due to the abrupt decline of revenues and, simultaneously, to the stagnation (or even increase) in the levels of costs facing these institutions face. Results can be explored from multiple perspectives, given that the set of explanatory factors is also multiple. However, the most interesting result relates to the varying effect of each covariate depending on each municipality’s specific debt level, which suggests that economic policy recommendations should not be homogeneous across local governments.

Keywords: debt; local government; quantile regression (search for similar items in EconPapers)
JEL-codes: D60 H71 H72 H74 H75 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2013
New Economics Papers: this item is included in nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:jau:wpaper:2013/16

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