The Role of Economic Growth

Oct 13, 2025 by magicalceylontours.com 57 views

Effect of Profit Sharing Funds, General Allocation Funds, Special Allocation Funds, and Special Autonomy Funds on Capital Expenditure with Economic Growth as a Moderating Variable in the District/City Government in Aceh Province (2008-2017)

Introduction

The management of funds in local governments is a crucial aspect of regional development. In Indonesia, the government has implemented various types of funds to support capital expenditure in district/city governments. These funds include profit sharing funds, general allocation funds, special allocation funds, and special autonomy funds. However, the effectiveness of these funds in supporting capital expenditure is still a topic of debate. This study aims to analyze the effect of these funds on capital expenditure in district/city governments in Aceh Province during the period 2008 to 2017, with economic growth as a moderating variable.

Background

The government of Indonesia has implemented various policies to support regional development, including the establishment of various types of funds. The profit sharing fund is a type of fund that is allocated to local governments based on their contribution to the national budget. The general allocation fund is a type of fund that is allocated to local governments based on their population and area. The special allocation fund is a type of fund that is allocated to local governments for specific purposes, such as infrastructure development. The special autonomy fund is a type of fund that is allocated to local governments in special autonomy regions, such as Aceh Province.

Methodology

This study used a quantitative approach to analyze the effect of profit sharing funds, general allocation funds, special allocation funds, and special autonomy funds on capital expenditure in district/city governments in Aceh Province during the period 2008 to 2017. The data used in this study were obtained from the Ministry of Home Affairs and the Aceh Provincial Government. The analysis was conducted using multiple regression analysis, with economic growth as a moderating variable.

Results

The results of this study showed that, simultaneously, the four types of funds had a significant influence on capital expenditure. However, when analyzed partially, the results showed a variation of influence between each type of fund. The profit sharing fund did not show a significant effect on capital expenditure, while the general allocation fund had a significant effect. On the other hand, the special allocation fund had no significant effect, but the special autonomy fund had a significant impact on capital expenditure.

Discussion

The results of this study suggest that the general allocation fund and special autonomy fund are the most effective types of funds in supporting capital expenditure in district/city governments in Aceh Province. The general allocation fund is a type of fund that is allocated to local governments based on their population and area, which makes it a more stable source of funding. The special autonomy fund is a type of fund that is allocated to local governments in special autonomy regions, which makes it a more specific source of funding.

The special allocation fund and profit sharing fund did not show a significant effect on capital expenditure. The special allocation fund is a type of fund that is allocated to local governments for specific purposes, such as infrastructure development. However, the results of this study suggest that the special allocation fund is not effective in supporting capital expenditure. The profit sharing fund is a type of fund that is allocated to local governments based on their contribution to the national budget. However, the results of this study suggest that the profit sharing fund is not effective in supporting capital expenditure.

Policy Implications

The results of this study have several policy implications. First, the general allocation fund and special autonomy fund should be optimized to have a greater impact on infrastructure development and public services. Second, the management of profit sharing funds and special allocation funds must be evaluated and improved in effectiveness, so that it can make a significant contribution to capital expenditure. Third, the government should consider increasing the allocation of funds to local governments, especially in special autonomy regions.

The Role of Economic Growth

Economic growth is often considered a major driver in regional development. However, in the context of this research, economic growth does not function as an effective mediator. This may be caused by various factors, such as macroeconomic conditions that are less stable or gaps in the distribution of existing resources. Therefore, increasing economic growth needs to be handled with more holistic policies, which include improving the quality of investment, innovation, and community involvement in development.

Recommendations for Further Research

This study opens opportunities for further study that can explore more about other factors that affect capital expenditure. For example, research can consider other variables such as the quality of human resources, the level of corruption, and community participation in the planning and budgeting process. Thus, stakeholders in the regions can formulate more comprehensive strategies to increase the effectiveness of the use of funds and encourage sustainable growth.

Conclusion

In conclusion, this study has shown that the general allocation fund and special autonomy fund are the most effective types of funds in supporting capital expenditure in district/city governments in Aceh Province. The special allocation fund and profit sharing fund did not show a significant effect on capital expenditure. The results of this study have several policy implications, including the optimization of the general allocation fund and special autonomy fund, the evaluation and improvement of the management of profit sharing funds and special allocation funds, and the consideration of increasing the allocation of funds to local governments.
Q&A: Effect of Profit Sharing Funds, General Allocation Funds, Special Allocation Funds, and Special Autonomy Funds on Capital Expenditure with Economic Growth as a Moderating Variable in the District/City Government in Aceh Province (2008-2017)

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of profit sharing funds, general allocation funds, special allocation funds, and special autonomy funds on capital expenditure in district/city governments in Aceh Province during the period 2008 to 2017, with economic growth as a moderating variable.

Q: What are the types of funds analyzed in this study?

A: The types of funds analyzed in this study are:

Profit sharing funds: a type of fund that is allocated to local governments based on their contribution to the national budget.
General allocation funds: a type of fund that is allocated to local governments based on their population and area.
Special allocation funds: a type of fund that is allocated to local governments for specific purposes, such as infrastructure development.
Special autonomy funds: a type of fund that is allocated to local governments in special autonomy regions, such as Aceh Province.

Q: What is the moderating variable in this study?

A: The moderating variable in this study is economic growth. The study aims to analyze whether economic growth can strengthen or weaken the influence of the four types of funds on capital expenditure.

Q: What are the results of this study?

A: The results of this study show that, simultaneously, the four types of funds have a significant influence on capital expenditure. However, when analyzed partially, the results show a variation of influence between each type of fund. The profit sharing fund does not show a significant effect on capital expenditure, while the general allocation fund has a significant effect. On the other hand, the special allocation fund has no significant effect, but the special autonomy fund has a significant impact on capital expenditure.

Q: What is the role of economic growth in this study?

A: The results of this study show that economic growth does not function as an effective mediator in the relationship between the four types of funds and capital expenditure. This may be caused by various factors, such as macroeconomic conditions that are less stable or gaps in the distribution of existing resources.

Q: What are the policy implications of this study?

A: The policy implications of this study are:

The general allocation fund and special autonomy fund should be optimized to have a greater impact on infrastructure development and public services.
The management of profit sharing funds and special allocation funds must be evaluated and improved in effectiveness, so that it can make a significant contribution to capital expenditure.
The government should consider increasing the allocation of funds to local governments, especially in special autonomy regions.

Q: What are the recommendations for further research?

A: The recommendations for further research are:

Research can consider other variables such as the quality of human resources, the level of corruption, and community participation in the planning and budgeting process.
Research can explore more about other factors that affect capital expenditure, such as the role of private sector investment and foreign aid.

Q: What are the limitations of this study?

A: The limitations of this study are:

The study only analyzed the effect of the four types of funds on capital expenditure in district/city governments in Aceh Province.
The study did not consider other factors that may affect capital expenditure, such as the role of private sector investment and foreign aid.

Q: What are the future directions of this research?

A: The future directions of this research are:

To explore more about the role of private sector investment and foreign aid in capital expenditure.
To analyze the effect of other variables, such as the quality of human resources and the level of corruption, on capital expenditure.
To develop a more comprehensive model of capital expenditure that includes the role of various factors, such as economic growth, private sector investment, and foreign aid.