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Fiscal health indicators for 21 local governments
in Taiwan were derived based on studies from
Kleine et al. (2003) and Kloha et al. (2005). To
identify the local governments with fiscal distress
for each year, we used three evaluation criteria in
this study. Local governments with a health score
exceeding these criteria are assumed to have fis-
cal distress in that year. The sum of the number
of local governments experiencing fiscal distress
across localities was calculated for each year
within the study period.
We base our inference on a regression of the
fiscal distress on the set of political and economic
variables. Given that the dependent variable is
integer-valued, and the fact that an ordinary least
squares analysis would result in ...