Abstract
This study aims to analyze the effect of Special Allocation Funds, Capital Expenditures and Investment on Economic growth in the Sulawesi region. The data used are secondary data obtained from Simreg Bappenas and the Central Statistics Agency during 2007-2016. The unit of analysis is 6 provinces in the Sulawesi region. This study uses a panel data regression model with the Random Effect Model (REM) method. The results of this study indicate that, (i) the Special Allocation Fund has a negative and significant effect on economic growth in the Sulawesi region. (ii) Capital expenditure shows a positive and significant influence on economic growth in the Sulawesi region. (iii) Investment shows a positive and significant influence on economic growth in the Sulawesi region.Keywords: Special Allocation Funds, Capital Expenditures, Investment, Economic Growth, Random Effect Model (REM).
Highlights
The role of the government as a distributor of development is very strategic in supporting the improvement of community welfare and economic growth in the region
The 2008 financial crisis first appeared in the United States and Britain triggered by speculation of property and inaccurate credit ratings that caused the collapse of several international financial institutions, crisis conditions this spread to other countries including Indonesia
Other variables namely Capital Expenditures have a positive influence on economic growth, each increase in capital expenditure by 1% will increase economic growth by 0.208 percent
Summary
The role of the government as a distributor of development is very strategic in supporting the improvement of community welfare and economic growth in the region. The consequences of the financial crisis are always painstaking with macroeconomic indicators, especially economic growth This was strengthened by the experience of the global crisis in 1997-1998 which caused negative economic growth in countries experiencing crisis. Sulawesi Island consists of 6 provinces which have different backgrounds between regions This difference is in the form of natural, social, economic, and natural resources characteristics whose distribution differs in each region. This shift is aimed at that in 2016 the highest economic growth increasing capital investment in the form of was achieved by Central Sulawesi Province fixed assets, namely equipment, buildings, with a growth of 9.98%. While the lowest of public services, because the fixed assets growth rate is West Sulawesi Province with owned as a result of capital expenditure are only reaching 5.97%.
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