UTICAJ FINANSIJSKIH DETERMINANTI NA INVESTICIONE AKTIVNOSTI I RAZVOJNE KAPACITETE JEDINICA LOKALNE SAMOUPRAVE

The investment activity and development capacity of local self-government units are influenced by a diverse set of financial determinants. Due to their frequent interdependence, assessing their joint effect is essential to accurately determine their impact on the realization of local capital projects. The paper empirically examines the impact of carefully selected financial determinants, including revenues per capita, public debt, the level of self-financing and fiscal autonomy, on the percentage share of capital expenditures in total expenditures of the 10 most indebted local self-government units in the Republic of Serbia, covering the period from 2011 to 2023. The empirical findings indicate that revenues per capita have a dominant impact on investment activity, suggesting that the actual fiscal strength of local self-government units is the most crucial factor in the realization of capital projects.