The Determinants of the Financial Distress of Italian Municipalities: How Much Is It Due to Inadequate Resources?-Reference-Cited by-同舟云学术

The Determinants of the Financial Distress of Italian Municipalities: How Much Is It Due to Inadequate Resources?

Published:2023-09-20 Issue: Volume: Page:
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Author:

Padovani Emanuele¹,Porcelli Francesco²,Zanardi Alberto¹

Affiliation:

1. University of Bologna

2. University of Bari

Abstract

Abstract The key question of this paper is whether the conditions of financial distress recently experienced by Italian municipalities can be at least partially imputed to the inadequacy of financial resources some municipalities suffer compared to the needs of their populations and territories. Starting from a multidimensional definition of financial distress, we investigate this issue by exploiting the new mechanism of equalization transfers recently implemented in Italy at municipal level which provides an exogenous measure of the resource gap possibly suffered by each municipality compared to their needs assessed on a standardized basis. The estimation results show that the Italian municipalities suffering from a level of resources below what is necessary to provide public services at standard levels are, ceteris paribus, more prone to run into financial difficulties. By the same token, large cuts in central government transfers have a statistically significant effect on financial vulnerability at municipal level. JEL: H70, H72, H77

Publisher

Research Square Platform LLC

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