Mursyidah, Mursyidah, Sanusi, Anwar and Harmono, Harmono ORCID: https://orcid.org/0000-0002-1933-5017 (2022) Regional Revenue and Economic Growth: through Direct Spending, Empirical Evidence from Indonesia. IOSR Journal of Economics and Finance (IOSR-JEF), 13 (4). pp. 36-48. ISSN p-ISSN: 2321-592 ; e-ISSN: 2321-5933

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Abstract

Background: This study aims to analyze the effect of regional revenues on economic growth through direct spending in the East Java Province of Indonesia. The measurement of regional revenue uses regional original revenue (ROR), general allocation funds (GAF), special allocation funds (SAF), profit-sharing funds (SF), direct spending (DS), and economic growth (EG) in the Regency/City of East Java Province, Indonesia. Materials and Methode This research is explanatory research through hypothesis testing. Samples were 38 districts/cities in East Java, with observations for 10 years from 2010 to 2019 by using path analysis. The results, indicate that GAF and SAF have an effect, while SF has no effect on Direct Expenditures. ROR and SF have an effect on economic growth while GAF has a negative effect and SAF has no effect on economic growth. Direct Spending has an Influence on Economic Growth. ROR, GAF, SAF, and SF have an effect on Economic Growth through Direct Spending. Therefore, local governments need to carry out various strategies to increase their direct expenditures related to economic growth through mapping regional potential

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