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Although punctuated equilibrium theory (PET) is widely hailed as the dominant theory regarding public policy and budgets, little research has extended PET to the local government arena or to capital expenditures. This article utilizes a panel dataset of public expenditures from Wisconsin counties, cities, villages, and towns from 1990-2009 to show that local operating and capital budgets fit the contemporary PET framework. However, the article also offers some discussion about methodological problems in assessing PET for local governments, and highlights the importance of differentiating between expenditure types (e.g. capital versus operating spending) as well as institutional differences between counties, cities, villages, and towns.

Sometimes regarded as the best method of prioritizing budgetary expenditures, Zero-Based Budgeting (ZBB) was introduced into China in the early 1990s and systematically adopted since the recent budgeting reform although it has experienced numerous failures in many countries. This study examines ZBB as practiced in Hubei province in China. In Hubei, although the reformers are intended to create ZBB as a general budgeting framework, eventually, it was a Chinese style Target-Based Budgeting (TBB) rather than ZBB that has been put into place. Interestingly, ZBB has not disappeared but is deliberately applied to budgetary decisions of one type of expenditures under the Chinese style TBB. However, even in the field where ZBB is practiced, its achievements are at best moderate. The Chinese experiment of ZBB presents something new not only for the theory of ZBB but also for the budgeting literature.

The purpose of this paper is to answer the following three questions about the new capital raised in initial public offerings (IPOs): why do some IPO companies raise a lot of new capital while some others do not? Where do the IPO companies use the new capital they raise in IPOs? How does the use of new capital affect the operating performance of IPO companies?

Matching firm approach, univariate and regression tests.

This paper finds that companies with higher research and development (R&D) spending, higher capital expenditure, lower working capital and more long-term debt tend to raise more capital in IPOs. These firms also spend more on R&D and capital expenditure. The results also suggest that the more the new capital firms raise in IPOs, the lower operating performance they have in subsequent years. However, firms spending more new capital on R&D and capital expenditure seem to perform better.

These results help us understand the behavior of IPO firms.

This paper documents the impact of product market competition on the value of advertising expenditures.

The authors use the data for non-financial firms from India and the pooled regression procedure to test their arguments during the period between 2009 and 2018.

The results show that advertising expenditures of firms operating in sectors with relatively high competition are more valuable than advertising expenditures of firms operating in sectors with relatively low competition. The results of the study are robust across various proxies of advertising expenditures and firm performance. Furthermore, the results also show that the positive impact of product market competition on the value of advertising expenditures is confined only to firms that already have lower agency problems.

The results of the study highlight the importance of product market competition on the value of advertising expenditure in the emerging market setting, where agency problems are supposed to be high.

This paper investigates the financial risk factors associated with fiscal distress in local governments. We hypothesize that fiscal distress is positively correlated with revenue concentration and debt usage, while negatively correlated with administrative costs and entity resources. The regression model results in a prediction of the likelihood of fiscal distress, which correctly classifies up to 91% of the sample as fiscally distressed or not. The model also allows for an analysis of the impact of a change in a risk factor on the likelihood of fiscal distress. A decrease in intergovernmental revenues as a percent of total revenues and an increase in administrative expenditures as a percent of total expenditures have the biggest influences on reducing the likelihood of fiscal distress.

This paper analyzes the impact of economic, social and political factors on municipal debt behavior. With this aim, we have obtained a stratified random sample of 130 cities during a five-year period. These data have been used to configure a micro panel to obtain accurate estimates and to control for problems such as unobserved heterogeneity. The main conclusion obtained from this process is that non-financial surplus/deficit, financial independence, capital expenditures, and capital revenues are the variables that best explain the indebtedness of this type of entities.

The purpose of this paper is to investigate whether constituents respond to local government accounting data. Since 2006, New Zealand local authorities (councils) have been required to disclose long-term accounting data relating to forecast operating revenue and expenses.

The authors test whether the difference between the actual operating expenditure as reported in the annual report and as forecasted is associated with electoral outcomes.

The authors find that accounting performance and the sign of accounting performance (i.e. expenditure over-runs) are associated with greater councilor re-election. Furthermore, accounting performance is also associated with greater voter turnout.

The production and disclosure of council planning data is based on the perceived accountability of the council to its constituents. The authors find that accounting, in an electoral context, has both information content and conveys good/bad news about accounting performance to voters.