| Summary: | 碩士 === 國立高雄應用科技大學 === 高階經營管理研究所碩士在職專班 === 105 === With the effort of the city government, the infrastructure of the City of Kaohsiung has drastically improved, as if evolving into a new city. The improvements signifies considerable achievements, yet the accumulation of public debt also brings to surface some apprehension; the increase in the amount of debt after the merger of Kaohsiung County and Kaohsiung city is especially alarming to the fiscal sustainability of Kaohsiung city government. This thesis investigates the fiscal sustainability in Kaohsiung by applying the unit root tests to test for the stationarity of fiscal deficit and debt to income ratio. The empirical evidence shows that maintaining no structural change point in the series, the common used ADF, PP and KPSS tests tend to wrongly accept the unit root null hypothesis, implying evidence of fiscal non-sustainability. However, if one takes into consideration the change point in the series, one could reject the unit-root hypothesis, providing evidence of fiscal sustainability. Hence, on examining the fiscal sustainability of Kaohsiung City, the structural change due to the merge of Kaohsiung City and County must not be overlooked. Additionally, although the public debt of Kaohsiung City is increasing, taken into consideration the increase in income, the income to debt ration exhibits no upward increasing trend; on the contrary, it exhibits mean reversion. The fiscal deficit seems to be restrained under monitor, and its scale remains constant, showing that in long terms, it could return to a normal consistent level.
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