Year: 2025 | Month: September | Volume: 12 | Issue: 9 | Pages: 621-637
DOI: https://doi.org/10.52403/ijrr.20250959
Analysis of the Effect of Local Own-Source Revenue, General Allocation Funds, Special Allocation Funds, And Village Funds on Economic Growth with Capital Expenditure as a Moderating Variable in Regency/City of Sumatera
Nurfathinah Hutasuhut1, Idhar Yahya2, Keulana Erwin3
1,2,3Department of Accounting, Faculty of Economics and Business, Universitas Sumatera Utara, Indonesia
Corresponding Author: Nurfathinah Hutasuhut
ABSTRACT
This study aims to analyze the influence of Local Own-sources Revenue, General Allocation Fund, Special Allocation Fund, and Village Funds on regional economic growth, with capital expenditure as a moderating variable, in districts/cities on Sumatra Island during the 2017–2023 period. This research was motivated by inconsistencies in previous research results and the need for a more comprehensive understanding of the effectiveness of public fund allocation in supporting regional economic development.
The research method used was a quantitative approach using secondary data analyzed through panel data regression and moderated regression analysis. The results indicate that Local Own-Sources Revenue and General Allocation Fund have a positive but insignificant effect on economic growth. Special Allocation Fund and Village Funds have a positive and significant impact. Capital expenditure significantly moderates the effect of Local Own-Sources Revenue and General Allocation Fund, but does not moderate the effect of Special Allocation Fund and Village Funds on economic growth. These findings indicate that the effectiveness of capital expenditure depends on the source of funds and the accuracy of budget allocation, and have important implications for strengthening fiscal governance in the regions.
Keywords: Local Own-sources Revenue, General Allocation Fund, Special Allocation Fund, Village Fund, Capital Expenditure, Economic Growth.
[PDF Full Text]