THE INFLUENCE OF REGIONAL INCOME ON REGENCY/CITY CAPITAL EXPENDITURE IN INDONESIA 2017-2020

Abstract

This research aims to determine whether regional revenue consisting of Local Own Source Revenue (PAD), General Allocation Fund (DAU), Special Allocation Fund (DAK), and Revenue Sharing Fund (DBH) influence Capital Expenditure in the governments of Districts/Cities in Indonesia for the period of 2017-2020. The sample used in this study consists of 503 Districts/Cities in Indonesia. The data used are secondary data taken from the Reports of Regional Revenue and Expenditure (APBD) of Districts/Cities in Indonesia for the observation period from 2017-2020, obtained from the Ministry of Finance. The data analysis tool used in this research is Multiple Linear Regression Analysis. Based on the test results, it shows that 1) Local Own Source Revenue has a positive influence on Capital Expenditure. 2) General Allocation Fund has a positive influence on Capital Expenditure. 3) Special Allocation Fund has a positive influence on Capital Expenditure. 4) Revenue Sharing Fund has a positive influence on Capital Expenditure. The results of this study have a positive impact, indicating that the higher the variables of PAD, DAU, DAK, and DBH, the higher the allocation of Capital Expenditure.