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Purpose: The aim of the paper is to examine indebtedness factors in the field of the structure of own revenues and expenditure as well as spatial relationships on the example of municipalities of the Wielkopolska Region in Poland. Design/methodology/approach: The subject literature was studied to present miscellaneous predictors of the indebtedness of the local governments. Then, using the fiscal, socio-economic, and political variables for 222 municipalities from Wielkopolska Region in Poland, panel data models with fixed effects were estimated for the period 2010-2021, and the spatial autocorrelation statistics. Findings: There is a direct relationship between the share of PIT and CIT in own revenues and the indebtedness of the municipalities. Furthermore, the decrease of the unemployment and the growth of the business density contribute to the decrease in the debt to revenues ratio. In addition, the increase of the indebtednessresulted from an increase of the investment activity, the share of spendings on wages as well as the expenditures on education. The use of EU funds also stimulates the indebtedness of the municipalities. Moreover, in 2018-2021 the territorial proximity affected the weak, positive correlation of the debt to revenues ratio between the municipalities. Research limitations/implications: The research presents the predictive power of the applied variables, which contributes to the identification of the role of the predictor in the creation of debt. Practical implications: The research study is aimed at the estimation of the models, which could be applied to predict the level of the indebtedness in the municipalities. Social implications: The research contributes to the higher recognition of the relationships between the changing fiscal, economic and political circumstances on the indebtedness of the municipality, e.g., in the process of creating local strategies. Originality/value: The study examines the indebtedness factors concerning the composition of the own revenues and expenditures, as well as the socio-economic issues and spatial relationships, considering the predictive power of each factor. [ABSTRACT FROM AUTHOR]

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Theoretical background: In the literature on finance there are findings which examine reasons for the fiscal distress of units of the public sector, including local governments. However, this distress might be differently defined. Therefore, it determines both the approach to identify this phenomenon and the types of explanatory variables. Nevertheless, in the field of the business sector in the econometric models concerning the financial distress the size of the unit is considered. In this case there are also some possibilities to apply the correct proxy variable. This results from the fact that the size of local government might determine its fiscal capability as well as the level and structure of expenditures, which affect fiscal distress. Purpose of the article: The aim of this paper is to examine the influence of the size of the local government on the probability of the decrease of the exposure to the fiscal distress. Research methods: The author reviewed the literature in the field of the fiscal distress and introduced a multi-criteria decision analysis as well as a logistic regression modelling to examine this. The research procedure also required the use of the linear ordering to construct the dependent variable of the fiscal distress in order to analyse the “size effect” on the fiscal distress.Main findings: Fiscal distress of local governments is a core issue, which should be constantly analysed. It depends on the financial, economic, social and even political aspects. To identify exposure to this distress the TOPSIS method can be used. However, the fiscal distress can be affected by the size of the unit, which influences lots of budgetary categories. Due to the specificity of dependent and independent variables in the econometric models the “size effect” might be represented through the level of the population or the assets. Using the ordinal logistic regression in the research, the authors should consider that this effect can differ between the units with the disparate exposure. So, the partial proportional odds models can be required. Thus, the growth of the size of the unit, measured by the population, increases the odds of reaching very low exposure to fiscal distress. Simultaneously, there are some other important issues which should be included in this type of research. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Computer Sciences Institute is the property of Lublin University of Technology and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)