The Effect of Financial Performance on Capital Expenditure and Economic Growth of Districts / Cities in North Maluku Province

Abstract

This study aims to examine the effect of financial performance on capital expenditure and economic growth in regency / city of North Maluku Province. The population was all districts and cities in North Maluku Province. Sampling was done by saturated sample method to 10 districts and cities in province of North Maluku. The research uses secondary data from Budget Realization Report 2016-2019 of audited Local Government Financial Statements by Republic of Indonesia Financial Audit Board. The research hypothesis was tested using Partial Least Square (PLS) analysis. This study results shows that financial performance affects on capital expenditures allocation, financial performance affects on economic growth, capital expenditures affect on economic growth, and financial performance affects on economic growth in districts / cities of North Maluku Province in 2016 - 2019 through the capital expenditures allocation. All the research results above can be proven at t count> t table and a significance value that is lower than 0.05.

Keywords: Financial Performance, Capital Expenditures, Economic Growth.

DOI: 10.7176/PPAR/11-3-03

Publication date: April 30^th 2021