Analysis of the Influence of Regional Original Income (PAD), Regional Expenditures on Economics Growth of District/City in North Sumatera Province

Abstract

This study aims to analyze the effect of regional original income (PAD), employee expenditures, goods and services expenditures, and capital expenditures districts/cities in North Sumatera Province. This study uses secondary data from 2000 to 2019 in 19 districts/cities in North Sumatera Utara Province. The data analysis model uses the ARDL (Autoregressive Distributed Lag) Panel’s model. Based on the result of the stationary test (root test) shows that the variables of regional original income (PAD), employee expenditure, goods and services expenditures, and capital expenditures stationary at level 1 (first different) and based on the result of the maximum lag test, the regional original income (PAD), employee expenditure, goods and services expenditures and capital expenditures variable are maximum at lag 2. The result of the ARDL panel research show that the Regional Original Income (PAD) variable has a negative and significant effect on economic growth in the long term, and a positive and significant effect on economic growth in the long term, and a positive and significant effect on economic growth in the short term. Employee expenditure variable has a positive and significant effect on economic growth in the long term, and has a negative and significant effect on economic growth in the short term. Shopping for goods and serivices has a positive and significant effect on economic growth in the long term, and has a negative an insignificant effect on economic growth in the short term. And the capital expenditure variable has a positive and significant effect on economic growth in the long term, and has a positive and significant effect on economic growth in the short term. Keywords: Economics Growth, Original Regional Income (PAD), Employee Expenditure, Goods and Services Expenditures, and Capital Expenditure.