The Effect of Capital Expenditures and General Allocation Funds on Local Financial Independence Through Local Revenue as an Intervening Variable in Districts and Cities in North Maluku Province

Abstract

This study aims to examine the effect of capital expenditure and general allocation funds on local financial independence, either directly or mediated by local revenue. The population is the APBD Realization Report from website of Director General of Local Government Matching Grant. The samples are the document of APBD Realization Report for Regency / City Governments in North Maluku Province for 2015-2019. Data are collected from 2015-2019 District and City Government APBD Realization Reports in North Maluku Province, BPK RI Audit Results Reports and website http://www.djpk.kemenkeu.go.id/ . The collected data is analyzed by multiple regression analysis and path analysis. The analysis found four findings. First, the General Allocation Fund partially has no effect on Local Financial Independence. Second, Capital expenditure partially does not affect on local financial independence. Third, the General Allocation Fund indirectly has a significant effect on Local Financial Independence through Local Revenue. Forth, Capital expenditure indirectly has a significant effect on Local Financial Independence through Local Revenue.

DOI: 10.7176/DCS/11-4-03

Publication date: April 30^th 2021