The Effect of local government size, wealth, balancing funds, capital expenditures, employee expenditures and budget financing surplus (SILPA) on regional financial independence in regency/city governments in North Sumatra province

Abstract

This study aims to determine the effect of Local Government Size, Wealth, Balance Fund, Capital Expenditure, Employee Expenditure, and Budget Financing Surplus (SILPA) on Regional Financial Independence at Regency/City Governments in North Sumatra Province. The population of this study were 33 regencies/cities in North Sumatra Province with a total sample of 28 regencies/cities in North Sumatra Province for the period 2020-2022 based on purposive sampling and using secondary data. The data analysis technique used is descriptive statistics, classical assumption test, multiple linear regression analysis then hypothesis testing. The results prove that partially, Capital Expenditure and Employee Expenditure have a significant positive effect on Regional Financial Independence, while Balance Funds have a significant negative effect on Regional Financial Independence. Local Government Size, Wealth and Budget Financing Surplus (SILPA) have no effect on Regional Financial Independence. Simultaneously, all independent variables have an influence on Regional Financial Independence.