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Article

Testing the Reliability of Financial Sustainability. The Case of Spanish Local Governments

Department of Accounting and Finance, Faculty of Economics and Business Administration, University of Zaragoza, Gran Vía, 2, 50005 Zaragoza, Spain
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Sustainability 2020, 12(17), 6880; https://doi.org/10.3390/su12176880
Received: 14 July 2020 / Revised: 13 August 2020 / Accepted: 20 August 2020 / Published: 24 August 2020
Local Governments (LGs) have strengthened the financial control as a consequence of mandatory requirements to ensure financial sustainability in their management. The aim of this study is to determine whether financial indicators about financial conditions defined in Spanish regulation are backed by worldwide generally accepted financial benchmarking indicators. For this purpose, we analyze the relationship between Spanish indicators of financial sustainability based on European Union (EU) regulations and Financial Trends Monitoring System Indicators (FTMS) of the International City/County Management Association (ICMA). For this purpose, two methodologies are applied: discriminant analysis and logistic regression, where the dependent variables are each of the Spanish financial indicators and the independent variables are ICMA indicators. The evidence supports that variables that are related to the control of expenditures, debt and the revenues show a greater explanatory power of financial sustainability, being the most important elements which offer relevant information about the financial sustainability measurement of LGs. View Full-Text
Keywords: financial sustainability; local governments; financial condition; benchmarking; financial indicators financial sustainability; local governments; financial condition; benchmarking; financial indicators
MDPI and ACS Style

Pina, V.; Bachiller, P.; Ripoll, L. Testing the Reliability of Financial Sustainability. The Case of Spanish Local Governments. Sustainability 2020, 12, 6880. https://doi.org/10.3390/su12176880

AMA Style

Pina V, Bachiller P, Ripoll L. Testing the Reliability of Financial Sustainability. The Case of Spanish Local Governments. Sustainability. 2020; 12(17):6880. https://doi.org/10.3390/su12176880

Chicago/Turabian Style

Pina, Vicente, Patricia Bachiller, and Lara Ripoll. 2020. "Testing the Reliability of Financial Sustainability. The Case of Spanish Local Governments" Sustainability 12, no. 17: 6880. https://doi.org/10.3390/su12176880

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