Abstract
This study aims to analyze the effect of good governance on regional financial performance and allocation of capital expenditures and their impact on economic growth in districts and cities in Riau Province. The research was conducted quantitatively with a causal and descriptive research design. The population in this study were 12 districts and cities in Riau Province. Data samples were obtained from the Revenue Service and the Regional Financial and Asset Management Office of Riau Province. The research was carried out by census on budget realization reports from 2016 to 2020 so that 60 data were obtained. The data analysis technique used was Partial Least Square (PLS) analysis. The results of this study indicate that good governance has a significant effect on regional financial performance and allocation of capital expenditures. Regional financial performance has a significant effect on the allocation of capital expenditures and does not have a significant effect on economic growth. Direct capital expenditure allocation has no significant effect on economic growth. Indirectly, good governance has a significant effect on economic growth through regional financial performance and allocation of capital expenditures Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0cm; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0cm; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} This study aims to analyze the effect of good governance on regional financial performance and allocation of capital expenditures and their impact on economic growth in districts and cities in Riau Province. The research was conducted quantitatively with a causal and descriptive research design. The population in this study were 12 districts and cities in Riau Province. Data samples were obtained from the Revenue Service and the Regional Financial and Asset Management Office of Riau Province. The research was carried out by census on budget realization reports from 2016 to 2020 so that 60 data were obtained. The data analysis technique used was Partial Least Square (PLS) analysis. The results of this study indicate that good governance has a significant effect on regional financial performance and allocation of capital expenditures. Regional financial performance has a significant effect on the allocation of capital expenditures and does not have a significant effect on economic growth. Direct capital expenditure allocation has no significant effect on economic growth. Indirectly, good governance has a significant effect on economic growth through regional financial performance and allocation of capital expenditures
Highlights
Good governance has become important for every entity both the private sector and the public sector and government
Regional financial performance has a significant effect on the allocation of capital expenditures and does not have a significant effect on economic growth
Direct capital expenditure allocation has no significant effect on economic growth
Summary
Good governance has become important for every entity both the private sector and the public sector and government. Stakeholders use good governance as a measure or benchmark in making decisions, especially investment decisions. An assessment of the implementation of good governance in private and government entities has begun to be carried out both at the national and international levels. In Indonesia, governance has been implemented since the reform era wherein that era there has been an overhaul of the government system for a clean democratic process so that governance/good governance is one of the reform tools that absolutely must be applied in the new government both at the centre and regions (Adisetiawawan, 2013). From the development of reforms that have been going on so far, the implementation of governance in Indonesia cannot be said to be fully successful. There are still many frauds and leaks in budget management
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