The Influence of Economic Growth and General Allocation Funds on the Capital Expenditure Budget in West Sumatra 2007-2020

Abstract

Economic growth in Indonesia is uneven so the impact on the capital expenditure budget is also uneven. Regions with high economic growth tend to have higher capital expenditure budgets. The sampling method in this research uses criteria regarding the Influence of Economic Growth and General Allocation Funds on the Capital Expenditure Budget in West Sumatra for 2007-2020 based on data contained in the West Sumatra Central Statistics Agency. The type of data used in this research is secondary data. Based on the regression results, it is known that the economic growth variable has a t-statistic value of 1.423780 and a probability value of 0.18230.05, so it can be concluded that the Economic Growth variable has a positive and insignificant relationship with the capital expenditure budget variable which is rejected. The general allocation fund variable has a t-statistic value of 0.526561 and a probability value of 0.60900.05, so it can be concluded that the general allocation fund variable has a positive and insignificant relationship with the capital expenditure budget variable. Therefore it was rejected. The F-statistic value is 1.443562 with a probability of 0.277519 α 0.05%, meaning that the variables of economic growth and general allocation funds simultaneously do not have a significant relationship with the capital expenditure budget variable. Regarding the influence of economic growth and general allocation funds on the West Sumatra capital expenditure budget, there are several suggestions as follows: To encourage economic growth, the West Sumatra Regional Government must work harder. This can be done in various ways, including increasing investment, encouraging the growth of MSMEs, and improving the quality of human resources. Then, better capital expenditure budget planning is needed by the West Sumatra Regional Government.