Abstract

This project was designed to : 1 ) explore the effects of Gross Domestic Product (GDP) , Own-source Revenue (PAD), and government transfer payments to local capital expenditures , both partially and simultaneously ; 2 ) find out the dominant variable which affected the local capital expenditure in Balikpapan . The data, which was obtained through literature review study, were in the type of secondary and time series records derived during the period of 2002 -2011. Further, these files were analyzed by implementing multiple linear regressions with three predictors technique , where the assumption tests was applied earlier presently before the main analysis . Eventually, t he results showed that : 1 ) GDP , Local Revenue and government transfer payments gave significant impact on local capital expenditures of Balikpapan simultaneously . a) GDP has considerable effect on local capital expenditures partially ; b ) local revenue has not extensively influence the local capital expenditure to some extent ; c ) the government transfer payments has not much influence on the local capital expenditure in some measure . 2 ) GDP was the most dominant variable affecting the local capital expenditures .

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