An Explanation of Local Government Debt in Spain Based on Internal Control System

  • Ester Gras University of Murcia, Faculty of Economics and Business, Campus de Espinardo, 30100 Murcia.
  • Joaquin Hernandez University of Murcia, Faculty of Economics and Business, Campus de Espinardo, 30100 Murcia.
  • Mercedes Palacios University of Murcia, Faculty of Economics and Business, Campus de Espinardo, 30100 Murcia.
Keywords: Local Government, debt, internal control

Abstract

The literature reflects a growing interest in the research of Public Sector debt. However, this is the first time that a variable of internal control is used to analyse interaction with the level of debt. This paper analyses the influence of the level of internal control in Spanish Local Government on indebtedness. We have obtained a sample of 1,806 Spanish municipalities. The main finding is that the level of internal control system influences the municipal debt per capita, so the higher the level of internal control, the lower the level of debt. Furthermore, we confirm previously reported results.

Author Biographies

Ester Gras, University of Murcia, Faculty of Economics and Business, Campus de Espinardo, 30100 Murcia.
Department of Accounting and Finance
Joaquin Hernandez, University of Murcia, Faculty of Economics and Business, Campus de Espinardo, 30100 Murcia.
Department of Accounting and Finance
Mercedes Palacios, University of Murcia, Faculty of Economics and Business, Campus de Espinardo, 30100 Murcia.
Department of Accounting and Finance
Published
2014-10-06
Section
Articles