Evaluation of the Level of Financial Standing and Its Selected Determinants Based on the Case of Gminas of the Wielkopolska Province Using the TOPSIS Method

Abstract

The aim of the study is to determine the level of financial standing of gminas, to evaluate differences thereof and to identify determinants influencing the level differences. An example of the Wielkopolska Province was used. Source material comes from the databases of the Ministry of Finance and the GUS Local Data Bank. In the first stage of the study, a synthetic financial measure was calculated using the TOPSIS method. The construction of this measure was preceded by the selection of indicators, whose dependence was checked by Ward’s method. In the second stage of the study, the characteristics of the separated groups of gminas were analyzed according to the level of financial standing. For this purpose selected descriptive statistics methods were used. The relation between the groups of level of financial standing and the groups of selected determinants was checked (Chi-squared test was used). The research has shown that the gminas in general feature average financial standing, which is determined by a location of gmina, type and the degree of technical infrastructure development. The gminas located next to a big city such as Poznań, are in the best financial situation while the outermost location limits the income potential of gminas, which adversely affects investment opportunities. This is not a prerequisite, however, as some gminas featuring lower financial independence also carry out numerous projects, albeit thanks to significant EU funding.