The effect of local own-source revenue and capital expenditure on economic growth: An empirical evidence from Aceh province, Indonesia

Abstract

This study examines the effect of local own-source revenue (PAD) and capital expenditure on economic growth in Aceh province, Indonesia. The data analysis method used is the quantitative method by setting the local revenue and capital expenditure variables as independent variables and the economic growth variable as the dependent variable. The data used is secondary data taken from the Local Government Financial Report and Central Bureau of Statistics, Aceh for 2009 to 2018. This study uses multiple linear regression analysis techniques with the help of the E-views 8 program. The results show that partially the local revenue variable has a significant negative effect on economic growth. The capital expenditure variable has a significant positive effect on economic growth in Aceh province. Meanwhile, simultaneously local revenue and capital expenditure have a significant effect on economic growth in Aceh province, Indonesia.