Effect Of Economic Growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds And Profit Sharing Funds On The Allocation Of District/city Capital Expenditure Budget In Nanggroe Aceh Darussalam Province
Effect of Economic Growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and Profit Sharing Funds on the Allocation of Capital Expenditures in the Regency/City of Nanggroe Aceh Darussalam Province
Introduction
The allocation of capital expenditure budget in local governments is a crucial aspect of regional development. In the Province of Nanggroe Aceh Darussalam, the allocation of capital expenditure budget is influenced by various factors, including economic growth, Regional Original Revenue (PAD), General Allocation Funds (DAU), Special Allocation Funds (DAK), and profit sharing funds (DBH). This study aims to analyze and understand the effect of these variables on the allocation of capital expenditure budget in existing districts/cities in the province.
Methodology
This study was conducted using multiple linear regression analysis to identify the effect of each of these variables on capital expenditure during the 2013 to 2016 period. The population used as the object of research includes all local governments in the Province of Nanggroe Aceh Darussalam, which consists of 18 districts and 5 cities. In this study, the saturated sample method was used to obtain 23 samples, which included all districts and cities in the province. With a total of four years of study period, there were 92 samples analyzed.
Results
The results showed that only two variables, namely Regional Original Revenue (PAD) and Special Allocation Funds (DAK), which had a significant effect on the allocation of capital expenditure budget. Meanwhile, other variables such as economic growth, General Allocation Funds (DAU), and profit sharing funds (DBH) do not show a significant effect in this context.
Discussion
Based on the results of the analysis, it can be seen that the Regional Original Revenue (PAD) has an important role in the allocation of capital expenditure budget. This can be understood considering that PAD is a major source of income for local governments to finance various development programs and activities. The greater the PAD obtained, the greater the ability of the region to allocate a capital expenditure budget for infrastructure and public services.
The Special Allocation Fund (DAK) also contributes to the allocation of capital expenditure budget. DAK is usually used to fund certain projects that are considered priority by the central government. Thus, the existence of DAK can help local governments in meeting the needs of capital expenditure that cannot be fully financed by PAD.
On the other hand, economic growth variables that do not have a significant effect may indicate that economic growth does not directly affect the allocation of capital expenditure in the regions. For example, even though the economy of a region grows, without good management and adequate sources of income, local governments may still have difficulty in planning and implementing capital expenditure.
Meanwhile, the General Allocation Fund (DAU) and profit sharing funds (DBH) which are expected to improve the welfare of the community and support infrastructure development, apparently have no significant influence on the allocation of capital expenditure. This can be caused by the management and use of funds that are less effective, or maybe because the area already has a more priority policy for other types of expenses that are not directly related to capital expenditure.
Conclusion
To increase the allocation of capital expenditure budget, it is important for local governments to focus on increasing PAD and Utilization of DAK optimally. In addition, there needs to be an evaluation and improvement in the management of funds from DAU and DBH in order to be more contributing to the development of infrastructure that is beneficial to the community.
Recommendation
This study provides important insights for decision makers at the regional level to formulate more effective policies in managing the capital expenditure budget, especially in the context of regional development in the Province of Nanggroe Aceh Darussalam. The findings of this study can be used as a reference for local governments to improve the allocation of capital expenditure budget and to increase the welfare of the community.
Limitation
This study has several limitations. Firstly, the study only focuses on the Province of Nanggroe Aceh Darussalam, and the findings may not be applicable to other provinces. Secondly, the study only uses data from 2013 to 2016, and the findings may not be representative of the current situation. Finally, the study only analyzes the effect of economic growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and profit sharing funds on the allocation of capital expenditure budget, and does not consider other factors that may influence the allocation of capital expenditure budget.
Future Research
Future research can build on the findings of this study by analyzing the effect of other factors on the allocation of capital expenditure budget. For example, future research can analyze the effect of human capital, institutional capacity, and social capital on the allocation of capital expenditure budget. Future research can also use more advanced statistical methods, such as panel data analysis, to analyze the effect of economic growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and profit sharing funds on the allocation of capital expenditure budget.
Conclusion
In conclusion, this study provides important insights into the effect of economic growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and profit sharing funds on the allocation of capital expenditure budget in the Regency/City of Nanggroe Aceh Darussalam Province. The findings of this study can be used as a reference for local governments to improve the allocation of capital expenditure budget and to increase the welfare of the community.
Frequently Asked Questions (FAQs) about the Effect of Economic Growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and Profit Sharing Funds on the Allocation of Capital Expenditures in the Regency/City of Nanggroe Aceh Darussalam Province
Q: What is the main objective of this study? A: The main objective of this study is to analyze and understand the effect of economic growth, Regional Original Revenue (PAD), General Allocation Funds (DAU), Special Allocation Funds (DAK), and profit sharing funds (DBH) on the allocation of capital expenditure budget in existing districts/cities in the Province of Nanggroe Aceh Darussalam.
Q: What is the population used as the object of research in this study? A: The population used as the object of research in this study includes all local governments in the Province of Nanggroe Aceh Darussalam, which consists of 18 districts and 5 cities.
Q: What is the sample size used in this study? A: The sample size used in this study is 23 samples, which includes all districts and cities in the province.
Q: What is the study period used in this study? A: The study period used in this study is from 2013 to 2016.
Q: What are the results of the analysis? A: The results of the analysis show that only two variables, namely Regional Original Revenue (PAD) and Special Allocation Funds (DAK), have a significant effect on the allocation of capital expenditure budget. Meanwhile, other variables such as economic growth, General Allocation Funds (DAU), and profit sharing funds (DBH) do not show a significant effect in this context.
Q: What is the role of Regional Original Revenue (PAD) in the allocation of capital expenditure budget? A: Regional Original Revenue (PAD) has an important role in the allocation of capital expenditure budget. This is because PAD is a major source of income for local governments to finance various development programs and activities.
Q: What is the role of Special Allocation Funds (DAK) in the allocation of capital expenditure budget? A: Special Allocation Funds (DAK) also contributes to the allocation of capital expenditure budget. DAK is usually used to fund certain projects that are considered priority by the central government.
Q: Why do economic growth variables not have a significant effect on the allocation of capital expenditure budget? A: Economic growth variables do not have a significant effect on the allocation of capital expenditure budget because economic growth does not directly affect the allocation of capital expenditure in the regions. For example, even though the economy of a region grows, without good management and adequate sources of income, local governments may still have difficulty in planning and implementing capital expenditure.
Q: Why do General Allocation Funds (DAU) and profit sharing funds (DBH) not have a significant effect on the allocation of capital expenditure budget? A: General Allocation Funds (DAU) and profit sharing funds (DBH) do not have a significant effect on the allocation of capital expenditure budget because the management and use of funds from these sources are less effective, or maybe because the area already has a more priority policy for other types of expenses that are not directly related to capital expenditure.
Q: What are the implications of this study for local governments? A: The findings of this study have implications for local governments in the Province of Nanggroe Aceh Darussalam. Local governments should focus on increasing PAD and utilizing DAK optimally to increase the allocation of capital expenditure budget. In addition, there needs to be an evaluation and improvement in the management of funds from DAU and DBH to be more contributing to the development of infrastructure that is beneficial to the community.
Q: What are the limitations of this study? A: This study has several limitations. Firstly, the study only focuses on the Province of Nanggroe Aceh Darussalam, and the findings may not be applicable to other provinces. Secondly, the study only uses data from 2013 to 2016, and the findings may not be representative of the current situation. Finally, the study only analyzes the effect of economic growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and profit sharing funds on the allocation of capital expenditure budget, and does not consider other factors that may influence the allocation of capital expenditure budget.
Q: What are the recommendations for future research? A: Future research can build on the findings of this study by analyzing the effect of other factors on the allocation of capital expenditure budget. For example, future research can analyze the effect of human capital, institutional capacity, and social capital on the allocation of capital expenditure budget. Future research can also use more advanced statistical methods, such as panel data analysis, to analyze the effect of economic growth, Regional Original Revenue, General Allocation Funds, Special Allocation Funds, and profit sharing funds on the allocation of capital expenditure budget.