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Article

Open Access

Separating Municipalities Regarding Their Financial Performance—Evidence From Greece

Author(s)

Christos Pallis
Petros Pallis

Full-Text PDF Download XML 433 Views

DOI:10.17265/2328-7144/2017.02.009

Affiliation(s)

Panteion University, Athens, Greece
University of Piraeus, Piraeus, Greece

ABSTRACT

Municipalities are autonomous economic and administrative entities, with common actions and responsibilities. Additionally, all Municipalities are quite different considering specific characteristics, such as geographic, demographic, and economic. The aim of this research is to separate the entire sample of Municipalities in Greece into categories, based on the effectiveness of financial management and financial performance into effective and ineffective ones. This investigation is substantial because it is very interesting in-depth observation of current situation of the financial management capabilities of Municipalities, and additionally because it is crucial to extract the differences in specific characteristics between economical efficient and inefficient Municipalities. For the separation of the sample into groups, cluster analysis was preferred. For this reason, three variables were used: the lending capacity of the municipality, flexibility in making non-investment costs, and flexibility in investment spending. These three variables were considered to be the key dimensions of effectiveness in financial management and therefore their use, representatively describes the effectiveness or not of Greek Municipalities. In this study, it investigated the existence of differences between the characteristics of these two categories. The features are “how Municipalities are working with specialist consultants” and “how Municipalities are using modern technologies”. The main objective is to investigate the influence of these two characteristics in the efficiency of managing financial resources.

KEYWORDS

Greek Municipalities, local development, financial performance, financial management, empirical investigation

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Separating Municipalities Regarding Their Financial Performance—Evidence From Greece

Christos Pallis Petros Pallis

Christos Pallis
Petros Pallis