Effects Of Regional Original Revenues, General Allocation Funds, Special Allocation Funds, Profit Sharing Funds On Regional Expenditures With Regional Financing As Moderating Variables

Feb 27, 2025 by ADMIN 185 views

Effects of Regional Original Revenues, General Allocation Funds, Special Allocation Funds, Profit Sharing Funds on Regional Expenditures with Regional Financing as Moderating Variables

Introduction

Regional financing plays a crucial role in determining the level of regional spending in various provinces across Indonesia. In North Sumatra, the source of regional income is a vital factor in determining the level of regional expenditure. This study aims to examine the effect of various sources of regional income on regional expenditure in North Sumatra, with a focus on the role of regional financing as a moderating variable. The study also aims to provide policy implications for local governments in North Sumatra to support sustainable regional development.

Background

Regional financing in Indonesia is primarily sourced from various funds, including Regional Original Revenue (PAD), General Allocation Funds (DAU), Special Allocation Funds (DAK), and Profit Sharing Funds (DBH). PAD is the revenue generated from regional sources, such as taxes and fees. DAU is a transfer fund from the central government to support regional spending. DAK is a special allocation fund provided by the central government to support regional development projects. DBH is a profit-sharing fund generated from regional businesses.

Regional financing is essential for supporting regional spending, which includes various expenditures, such as personnel costs, operational costs, and capital expenditures. The level of regional spending is influenced by various factors, including the source of regional income, regional financing, and the structure of regional government.

Methodology

This study used a multiple regression analysis to examine the effect of various sources of regional income on regional expenditure in North Sumatra. The data used was pooling data, a combination of time series and cross-section data downloaded from the site http://www.djpk.depkeu.go.id. The study selected 33 districts/cities in North Sumatra, with 22 districts/cities selected as samples.

The analysis method used was multiple regression and residual tests for moderating variables. The results showed that PAD, DAU, DAK, and DBH significantly affected regional expenditure, both simultaneously and partially. This means that an increase in one or a combination of revenue sources will significantly increase regional expenditure in North Sumatra.

Results

The results of the study showed that all sources of regional income under study, namely PAD, DAU, DAK, and DBH, significantly affected regional expenditure. This shows that the source of regional income is an important factor in determining the level of regional spending in North Sumatra.

However, the results showed that regional financing did not act as a moderating variable. This means that regional financing cannot strengthen or weaken the effect of revenue sources on regional expenditure.

Role of Regional Revenue Sources

Role of Regional Financing

Although it did not act as a moderating variable, regional financing remains important in supporting regional spending. Regional financing can be obtained from various sources, such as loans, issuance of debt securities, and investment funds. The use of regional financing needs to be done wisely and responsibly so as not to cause uncontrolled financial burdens in the future.

Policy Implications

The results of this study provide some policy implications for local governments in North Sumatra:

Increasing PAD: Increased PAD will provide greater flexibility for local governments in determining spending priorities and reducing dependence on transfer funds from the central government.
Efficiency of the use of transfer funds: Local governments need to ensure efficiency in the use of DAU, DAK, and DBH so that it can be maximized to achieve regional development goals.
Improvement of Regional Financing Governance: Local governments need to increase regional financing governance to ensure effective, efficient, and accountable use.

Conclusion

This study shows that the source of regional income has a significant influence on regional spending in North Sumatra. However, regional financing does not act as a moderating variable. Local governments need to continue to increase PAD and strengthen regional financing governance to support sustainable regional development.

Suggestion

Further research needs to be done to analyze the effect of other variables that might affect regional spending, such as the structure of regional government, poverty rates, and unemployment rates.
A more in-depth analysis is needed about the factors that inhibit the increase in PAD in North Sumatra.

Keywords

Regional Original Revenue, General Allocation Funds, Special Allocation Funds, Revenue Sharing Funds, Regional Expenditures, Regional Financing, North Sumatra.

Limitations of the Study

This study has several limitations. Firstly, the study only examined the effect of various sources of regional income on regional expenditure in North Sumatra. Secondly, the study did not examine the effect of other variables that might affect regional spending, such as the structure of regional government, poverty rates, and unemployment rates. Thirdly, the study did not provide a detailed analysis of the factors that inhibit the increase in PAD in North Sumatra.

Future Research Directions

This study provides several future research directions. Firstly, further research needs to be done to analyze the effect of other variables that might affect regional spending, such as the structure of regional government, poverty rates, and unemployment rates. Secondly, a more in-depth analysis is needed about the factors that inhibit the increase in PAD in North Sumatra. Thirdly, further research needs to be done to examine the effect of regional financing on regional spending in other provinces across Indonesia.

Conclusion

In conclusion, this study shows that the source of regional income has a significant influence on regional spending in North Sumatra. However, regional financing does not act as a moderating variable. Local governments need to continue to increase PAD and strengthen regional financing governance to support sustainable regional development.
Q&A: Effects of Regional Original Revenues, General Allocation Funds, Special Allocation Funds, Profit Sharing Funds on Regional Expenditures with Regional Financing as Moderating Variables

Q: What is the main objective of this study?

A: The main objective of this study is to examine the effect of various sources of regional income on regional expenditure in North Sumatra, with a focus on the role of regional financing as a moderating variable.

Q: What are the sources of regional income under study?

A: The sources of regional income under study are Regional Original Revenue (PAD), General Allocation Funds (DAU), Special Allocation Funds (DAK), and Profit Sharing Funds (DBH).

Q: What is the significance of PAD, DAU, DAK, and DBH in determining regional expenditure?

A: The results of the study show that all sources of regional income under study, namely PAD, DAU, DAK, and DBH, significantly affected regional expenditure. This shows that the source of regional income is an important factor in determining the level of regional spending in North Sumatra.

Q: Does regional financing act as a moderating variable in determining regional expenditure?

A: No, the results of the study show that regional financing does not act as a moderating variable. This means that regional financing cannot strengthen or weaken the effect of revenue sources on regional expenditure.

Q: What are the policy implications of this study for local governments in North Sumatra?

A: The results of this study provide some policy implications for local governments in North Sumatra:

Increasing PAD: Increased PAD will provide greater flexibility for local governments in determining spending priorities and reducing dependence on transfer funds from the central government.
Efficiency of the use of transfer funds: Local governments need to ensure efficiency in the use of DAU, DAK, and DBH so that it can be maximized to achieve regional development goals.
Improvement of Regional Financing Governance: Local governments need to increase regional financing governance to ensure effective, efficient, and accountable use.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the study only examined the effect of various sources of regional income on regional expenditure in North Sumatra. Secondly, the study did not examine the effect of other variables that might affect regional spending, such as the structure of regional government, poverty rates, and unemployment rates. Thirdly, the study did not provide a detailed analysis of the factors that inhibit the increase in PAD in North Sumatra.

Q: What are the future research directions of this study?

A: This study provides several future research directions. Firstly, further research needs to be done to analyze the effect of other variables that might affect regional spending, such as the structure of regional government, poverty rates, and unemployment rates. Secondly, a more in-depth analysis is needed about the factors that inhibit the increase in PAD in North Sumatra. Thirdly, further research needs to be done to examine the effect of regional financing on regional spending in other provinces across Indonesia.

Q: What are the implications of this study for regional development in North Sumatra?

A: The results of this study show that the source of regional income has a significant influence on regional spending in North Sumatra. However, regional financing does not act as a moderating variable. Local governments need to continue to increase PAD and strengthen regional financing governance to support sustainable regional development.

Q: What are the implications of this study for regional financing governance in North Sumatra?

A: The results of this study show that regional financing governance needs to be improved to ensure effective, efficient, and accountable use. Local governments need to increase regional financing governance to support sustainable regional development.

Q: What are the implications of this study for regional expenditure in North Sumatra?

A: The results of this study show that regional expenditure in North Sumatra is influenced by various sources of regional income, including PAD, DAU, DAK, and DBH. Local governments need to ensure efficiency in the use of these funds to achieve regional development goals.