Abstract

This study aims to analyses and determine the dominant factors that influence regional spending and its impact on gross regional domestic products and to analyses the direct and indirect effects of regional own revenue, general allocation fund and revenue sharing fund on gross regional domestic products mediated by regional expenditure. Data uses panel data with 17 Regency / Municipality in Southeast Sulawesi and observation period for 2015-2017. Data analysis used path analysis with AMOS 18.0 program and indirect effect test using the Sobel test. The results of the study conclude: a) General Allocation Funds and Revenue Sharing Funds significantly affect Regional Expenditures, while Regional Own Revenues are insignificant; b) Regional Own Revenue and Revenue Sharing Fund significantly affect the Gross Regional Domestic Product, while the General Allocation Fund is not significant; c) Regional Expenditure significantly mediated the effect of General Allocation Funds and Revenue Sharing Fund on Gross Regional Domestic Products, while Regional Expenditures do not significantly mediate in the influence of Regional Own Revenue on Gross Regional Domestic Product. Whereas to increase the gross regional domestic products in Regency / Municipality in Southeast Sulawesi, it is better to regulate Regional Expenditure allocations sourced from the General Allocation Fund.

Highlights

  • Economic growth is a requirement that is needed in carrying out economic development

  • The level of economic growth achieved by a country is measured by the development of real national income achieved by a country or region

  • The progress of sustainable economic growth in each region is of concern to the government because basically national economic growth is an aggregation of regional economic growth

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Summary

Introduction

Economic growth is a requirement that is needed in carrying out economic development. Growth is a major measure of development success. Economic growth measures the achievement of the development of an economy from one period to the next. The ability of a country to produce goods and services will increase due to factors of production that always experience an increase in the number and quality. The level of economic growth achieved by a country is measured by the development of real national income achieved by a country or region. Regional development is an integral part of national development carried out in improving community welfare. The progress of sustainable economic growth in each region is of concern to the government because basically national economic growth is an aggregation of regional economic growth. Economic growth between regions in Indonesia is very diverse

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