An empirical analysis of capital assets condition ratio in local governments: the case of Florida counties

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xiaoheng Wang ◽  
Can Chen
Keyword(s):  
Local Governments ◽  
Fixed Effects ◽  
Generalized Method Of Moments ◽  
Financial Statements ◽  
County Government ◽  
Government Investment ◽  
Content Type ◽  
Capital Assets ◽  
Institutional Determinants ◽  
The Government

PurposeThe main purpose of this paper is to examine the political, economic and institutional determinants of capital assets condition ratio in American local governments using government-wide financial statements.Design/methodology/approachBased on capital assets data from the period of 2011–2016 for the 66 Florida counties as reported on their government-wide financial statements, the authors use a panel two-way fixed effects estimation and a dynamic panel generalized method of moments estimation.FindingsThe authors find that social-economic factors, fiscal capacity and democratic voters explain the capital assets condition ratio in Florida county governments.Research limitations/implicationsThe major findings of this study may only apply to county government in one single state. It may raise the issue of the external validity of our research. It provides policy recommendations for local public officials to maintain and upgrade their capital assets.Originality/valueThe study utilizes a new approach of capital assets condition ratio to measure county government investment in capital assets based on the government-wide financial statements.

Capital spending in local government

2018 ◽  
Vol 30 (4) ◽  
pp. 402-414 ◽  
Author(s):  
William C. Rivenbark ◽  
Whitney Afonso ◽  
Dale J. Roenigk
Keyword(s):  
Local Government ◽  
Capital Investment ◽  
Financial Statements ◽  
Fiscal Year ◽  
Content Type ◽  
The Great Recession ◽  
Financial Variables ◽  
Capital Assets ◽  
Capital Spending ◽  
The Government

Purpose The purpose of this paper is to understand the impact of the Great Recession on the capital assets being depreciated and the capital assets condition ratio for the governmental activities of the government-wide financial statements, while identifying possible socioeconomic and financial variables that help explain capital investment behavior in local government. Design/methodology/approach Based on capital spending from fiscal year 2005–2006 (FY06) to fiscal year 2012–2013 (FY13) for the governmental activities of 471 North Carolina municipalities as reported on their government-wide financial statements, the authors use a fixed effects model to test our two hypotheses. Findings The authors find that most municipalities consistently invested in capital assets before, during, and after the Great Recession but were not able to maintain pace with depreciation. The authors also find that the capital assets being depreciated is affected by numerous socioeconomic and financial variables, while the capital assets condition ratio is not. Research limitations/implications The study continues to build on previous research, demonstrating that different results are produced when the analysis is based on local data rather than sub-national data. Practical implications An implication from our study that expands across research and practice is that capital investment and capital value are two different dimensions of capital management in local government, which drives research in terms of how this multidimensional concept is specified and drives practices in terms of how this multidimensional concept is approached within annual capital budgets and capital improvement programs. Originality/value The study represents one of the first studies that focuses on capital spending in local government based on data from the government-wide financial statements.

Perceived effectiveness of e-governance as an underlying mechanism between good governance and public trust: a case of Indonesia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dadang Hartanto ◽  
Juhriyansyah Dalle ◽  
A. Akrim ◽  
Hastin Umi Anisah
Keyword(s):  
Local Governments ◽  
Good Governance ◽  
Underlying Mechanism ◽  
Public Trust ◽  
The Body ◽  
Perceived Effectiveness ◽  
Content Type ◽  
Body Of Knowledge ◽  
Governance Effectiveness ◽  
The Government

Purpose This study aims to investigate the association of perceived accountability, perceived responsiveness and perceived transparency, and public trust in local government. Additionally, mediation of the perceived effectiveness of e-governance was also tested between these relationships. Design/methodology/approach Using a quantitative cross-sectional field survey, primary data was collected at local administration levels from two cities in Indonesia. The final data set of 355 respondents was then analyzed using SmartPls3 and the measurement and structural models were tested. Findings Positive results were obtained for all the hypothesized links (direct and indirect relationships). The study’s findings revealed useful insights for policymakers and researchers regarding the public’s perception of good governance and their expectations from the government, which further lead toward trust in local governments. Practical implications The study concluded that good governance practices develop and enhance the public’s trust in the government, thus provided key policy directions. Originality/value This study contributes to the body of knowledge related to good governance elements and their impact on public trust in the local government via the underlying mechanism of perceived e-governance effectiveness in developing countries in general and particularly the Indonesian context. Moreover, it is a unique study in the good governance domain while considering three good governance elements into a single theoretical framework. Previous studies have explored these elements individually with public trust, so this combined framework advances the body of knowledge. This research’s findings also contributed toward validating good governance theory with e-governance effectiveness and public trust integration in a single comprehensive framework. This research also helped answer the questions arising from past literature about declining public trust trends in local governments.

scholarly journals Transparency of local government in Indonesia

2018 ◽  
Vol 3 (1) ◽  
pp. 123-138 ◽  
Author(s):  
I Made Pradana Adiputra ◽  
Sidharta Utama ◽  
Hilda Rossieta
Keyword(s):  
Local Government ◽  
Financial Reporting ◽  
Local Governments ◽  
Financial Statements ◽  
Political Environment ◽  
Content Type ◽  
Audit Opinion ◽  
Government Response ◽  
Positive Effect

Purpose The purpose of this paper is to provide empirical evidence about the influence of the size of local government, the quality of local government financial statements, the level of local government response to the disclosure of financial information and the local political environment on the transparency of local government in Indonesia. Design/methodology/approach The study sample consisted of 34 regional governments (provinces) in Indonesia in 2016, using purposive sampling and multiple regression analysis. Findings The results showed that the quality of financial reporting through the audit opinion and political environment have a significant positive effect on the transparency of local government in Indonesia. On the other hand, the size of the local government and local government response rate on the regulation do not affect the transparency of local government in Indonesia. Originality/value The agency, legitimacy and institutional theory have an important role in the underlying local government transparency practices in Indonesia. The results of this study should be used as the basis of thought and study to determine the factors that affect the performance of local governments from the financial and non-financial aspects.

Bank competition, government intervention and SME debt financing

2017 ◽  
Vol 7 (4) ◽  
pp. 478-492 ◽  
Author(s):  
Jianhua Du ◽  
Chao Bian ◽  
Christopher Gan
Keyword(s):  
Government Intervention ◽  
Generalized Method Of Moments ◽  
External Debt ◽  
Ordinary Least Squares ◽  
Debt Financing ◽  
Bank Loans ◽  
Bank Competition ◽  
Firm Level ◽  
Content Type ◽  
The Government

Purpose The purpose of this paper is to examine the effects of the government intervention and bank competition on small and medium enterprise (SME) external debt financing in Chinese capital market. Design/methodology/approach This study uses ordinary least squares with standard errors clustered at the firm level. In addition, the authors use the dynamic system generalized method of moments to address the possible endogeneity issue in the regressions. Findings Using a sample of 908 firms from 2000 to 2010, the authors found that SMEs are more likely to access bank loans only in regions with higher level of government intervention than median government intervention. Further, the result shows that the government is motivated to help SMEs to obtain more external debt in regions where the level of bank competition is lower than the median bank competition index. Last, the authors found evidence that firms with politically connected CEOs are likely to access bank loans. Research limitations/implications This paper highlights that government intervention enables the SMEs to secure more bank loans. Second, the authors’ results imply that the government is motivated to help SMEs to obtain more external debt in regions with low level of bank competition. Originality/value This study contributes to the current literature by revealing that government intervention is the driving force alleviating SMEs’ constraints in accessing external financing. Second, this study finds the evidence to supports the argument that government has a strong motive to help SMEs to secure long-term credits for political purpose (Fan et al., 2012), when the level of bank competition is low (Berger and Udell, 2006).

Guest editorialHappy endings and successful stories in public sector financial management: a lesson drawing perspective

2021 ◽  
Vol 34 (4) ◽  
pp. 393-406
Author(s):  
Sandra Cohen ◽  
Francesca Manes-Rossi ◽  
Isabel Brusca ◽  
Eugenio Caperchione
Keyword(s):  
Public Sector ◽  
Financial Management ◽  
Local Governments ◽  
Financial Statements ◽  
Special Issue ◽  
Content Type ◽  
Public Financial Management ◽  
Political Implications ◽  
Public Sector Organizations ◽  
And Performance

PurposePublic financial management has been characterized by the implementation of several innovations and reforms that embrace different areas and scope. These reforms aim at expenditure rationalization and efficiency enhancement, as well as the improvement of accountability and performance. Despite research having already paid attention to these innovations and reforms, the strengths, weaknesses, opportunities and threats empirically faced by public sector organizations still need to be investigated. This editorial introduces the special issue by emphasizing on the lessons that can be learned from past reform experiences.Design/methodology/approachThe editorial synthesizes some of the findings of the previous literature and evidences the necessity of both successful and unsuccessful stories, presenting a future agenda of research which emphasizes the use of case studies as a suitable method to get insights out of multiple experiences.FindingsThe four articles presented in this special issue, covering the topics of accrual accounting adoption, the use of financial statements by councilors, the use of performance information by politicians and the outsourcing of auditing in local governments, provide an overview of the efforts and challenges faced by public administrations by analyzing the influence of the institutional context, the relevance of political implications and their practical footprint.OriginalityIn this special issue, four successful stories that touch upon multiple facets of public financial management in different country contexts are discussed, and they signal important takeaway messages for further reforms.

The relationship between intellectual capital and financial statements readability: the role of management characteristics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahdi Salehi ◽  
Hassan Mohammadzadeh Moghadam ◽  
Zohreh Hajiha
Keyword(s):  
Regression Model ◽  
Intellectual Capital ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Financial Statements ◽  
Multiple Regression Model ◽  
Content Type ◽  
The Relationship

Purpose The present study aims to investigate the relationship between intellectual capital and the readability of financial statements with the mediating role of management characteristics of companies listed on the Tehran Stock Exchange. In other words, this research tries to find the answer to whether intellectual capital can positively affect the readability of financial statements. Design/methodology/approach A multivariate regression model was used to test the hypotheses for this purpose. The research hypotheses were tested using a sample of 1,309 observations listed on the Tehran Stock Exchange from 2012 to 2018 and a multiple regression model based on panel data and fixed-effects models. Findings The results indicate that intellectual capital has a positive and significant relationship with the readability of financial statements, which means that with increasing intellectual capital in companies, financial statements’ readability also increases. Based on the hypothesis test results, it has been determined that narcissism, accrual and real earnings management have a negative effect on the relationship between intellectual capital and the readability of financial statements. Originality/value Since the present study examines such an issue in emerging markets, it provides users, analysts and legal entities with useful information about management’s inherent and acquired characteristics that significantly impact the purchase of audit opinion. This study’s results also contribute to developing science and knowledge in this field and close the literature gap.

scholarly journals Substitute or complement? The use of trade credit as a financing source among SMEs

2017 ◽  
Vol 40 (1) ◽  
pp. 10-27 ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Fixed Effects ◽  
Trade Credit ◽  
Generalized Method Of Moments ◽  
Short Term ◽  
Content Type ◽  
System Models ◽  
Accounts Payable ◽  
Short And Long Term ◽  
Retained Earnings

Purpose This study aims to investigate trade credit as a financing source among small- and medium-sized enterprises (SMEs), particularly the influence of short-term debt, long-term debt and profitability on the use of such credit. Design/methodology/approach Ordinary least squares (OLS), fixed-effects and generalized method of moments (GMM) system models were used to analyze a large cross-sectional panel data set of 15,897 Swedish SMEs in five industry sectors for the 2009-2012 period. Findings The study provides empirical evidence that long-term debt and profitability each significantly and negatively influence trade credit (i.e. accounts payable) and that short-term debt positively influences trade credit. Notably, while trade credit seems to complement other short-term debt, it replaces long-term debt. Moreover, firm size in terms of sales is positively related and firm age is negatively related to accounts payable. Industry affiliation is another significant explanatory variable. Practical implications The results provide debt holders, potential investors, policymakers and academic researchers with insights into the relationship between trade credit demand, on the one hand, and external financing (i.e. short- and long-term debt) and internal retained earnings (i.e. profit), on the other. From a manager’s perspective, the findings may be important for decision-making regarding trade credit use. Originality/value When investigating trade credit determinants, the literature has seldom distinguished between short- and long-term debt and considered that they may influence the use of trade credit in different ways. The present study adds to the literature by using OLS, fixed-effects and GMM system models to analyze a large cross-sectoral sample in a high-tax country where both bank loans and trade credit are considered important financing instruments.

scholarly journals Financial statements disclosure on Indonesian local government websites

2019 ◽  
Vol 4 (1) ◽  
pp. 112-128
Author(s):  
Wahyudin Nor ◽  
Muhammad Hudaya ◽  
Rifqi Novriyandana
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Financial Statements ◽  
Education Level ◽  
Content Type ◽  
Audit Opinion ◽  
Level Of Education ◽  
The Public ◽  
Government Websites

Purpose The purpose of this paper is to examine the extent to which audit opinion, audit findings, follow-up audit recommendations, level of education, level of welfare and heads of local governments’ commitment influence the disclosure of financial statements on the official website of local government. Design/methodology/approach The data of this research comprise 68 financial statements during the period 2015–2016 collected from 34 local governments across Indonesia by employing the census method. The data then are analyzed using logistic regression. Findings The results of this study show that audit opinion has a positive significant influence on the disclosure of financial statements on local government websites in Indonesia, while the audit findings, follow-up audit recommendations, level of education, level of welfare and heads of local governments’ commitment have no significant influences on the disclosure of financial statements local governments’ websites across Indonesia. Originality/value The study contributes to the public sector accounting research by enhancing our understanding to the disclosure of financial statements on local government websites.

Capital flight and extent of corruption control in the least corrupt African countries

2019 ◽  
Vol 13 (3) ◽  
pp. 469-483 ◽  
Author(s):  
Thales Pacific Yapatake Kossele ◽  
Magalie Gabriella Ngaba Mbai-Akem
Keyword(s):  
Sustainable Development ◽  
Fixed Effects ◽  
Negative Impact ◽  
Economic Environment ◽  
Capital Flight ◽  
African Countries ◽  
Content Type ◽  
The Sustainable Development ◽  
The Government ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the effect of corruption control on capital flight in the least corrupt African countries. Design/methodology/approach Using panel data covering the period of 1996-2010. Findings The results show that the extent of corruption, the total natural resources rent are statistically significant and affect positively the capital across the pooled, random and fixed effects. Inflation and economic growth are also found to have a negative impact on capital flight. Moreover, the exchange rate has a negative and significant effect on capital flight. Practical implications The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. Social implications The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This, in turn, will reduce the occurrence of capital flight and lead to the sustainable development. Originality/value The findings of this study suggest that the extent of corruption control by responsible institutions can be considered as one of the most effective weapons in the fight against capital flight in the least corrupt African countries. The paper recommends to the government of the least corrupt countries in Africa to create an enabling political and economic environment for investor’s attractiveness. This, in turn, will reduce the occurrence of capital flight and lead to the sustainable development.

A decision model for municipal resources management

2019 ◽  
Vol 57 (11) ◽  
pp. 3015-3034 ◽  
Author(s):  
Shirley Suellen Thesari ◽  
Flavio Trojan ◽  
Dayse Regina Batistus
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Historical Data ◽  
Life Quality ◽  
Public Budget ◽  
City Development ◽  
Content Type ◽  
Local Government Management ◽  
The Government ◽  
Practical Implications

Purpose The purpose of this paper is to present a model to support governmental local managers in public budget optimization, based on an integration of methods. It was constructed to fill the gap related to weights definition in problematic, commonly performed subjective assessments. This model supports the decision making in budget distribution identifying the importance of sectors in local governments, captured by historical data. Design/methodology/approach The model was developed following three steps: the first step included the exploitation of the characteristics of local sectors represented by city departments and the data collection procedure using time series (TS). In the second one, the weights regarding the importance of each city department were calculated by the UTASTAR method and based on historical data from the first step. Finally, an objective function was formulated using linear programming and constraints based on law specifications, and as a result, an optimized projection for public budget distribution was performed. Findings The results demonstrated that the model can be more efficient to weights definition, considering the behavior of preferences by historical data and supporting local public resources optimization, also to comply with the legislation, being able to predict or project future values available on the budget. Research limitations/implications The theoretical and practical implications are related with a novelty in recognizing the weights for criteria by a historical behavior of preferences. It can be bringing important directions for budget distribution. The main limitation detected in this study was the difficulty to formulate an assessment involving an integrated opinion from local managers and the population. Practical implications First of all, with the correct allocation of resources, the government has a greater advantage to capture investments from the negotiation with development entities and banks. Second, an efficient local government management can promote compliance with legislation and more transparent public policies. Social implications The correct distribution of resources affects the life quality for citizens, since the government acts as a provider of essential services for the population like education, safety, health, particularly for citizens who depend exclusively on the services offered by the local government. Moreover, it can also affect the environment as resources for garbage collection, disposal services and sanitation and, finally, affect the city development such as infrastructure, taxes, etc. Originality/value It might be considered an original contribution mainly by the development of a procedure to capture values for weights by TS and meeting the manager’s requirements, based on analytical, statistical and mathematical tools integrated.

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