Article Sidebar

Download
PDF
Statistic
Read Counter : 123 Download : 148

Main Article Content

Abstract

The motivation of this paper aims to investigate the relationship between local taxes, DAU, and DBH on the economic growth of Berau Regency. Apart from that, the paper also identifies the relationship between regional taxes, DAU, and DBH on economic growth which interacts with regional expenditure in Berau Regency. Government revenue is an important instrument for regions to foster economic growth. At the same time, government spending is used as a fiscal support to review the degree of budget absorption. With surplus revenue performance, it will generate financing which also plays a vital function in boosting economic growth. Secondary data for 2013–2022 was collected from government budget documents. Then, the data is tabulated using a time-series linear regression model with moderating variables. The statistical output finds that regional taxes and DBH have a negative effect on economic growth. However, DAU actually has a positive effect on economic growth. Uniquely, the interaction between regional taxes and DAU which is moderated by regional spending has a positive influence on economic growth. Then, regional spending plays a negative role in the relationship between DBH and economic growth. Future implications of considering practical regulations that do not only depend on income from the DAU side, but must focus on the existence of regional taxes in Berau Regency. By optimizing regional taxes, it also allows for a large fiscal gap in terms of regional spending. Financing the development of Berau Regency requires adequate expenditure allocation.

Keywords

Regional Taxes General Allocation Funds Profit Sharing Funds Regional Spending Economic Growth Time-Series Linear Regression

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Roy, J., Rochaida, E., & Suharto, R. B. (2024). Economic Growth Model with Regional Expenditure as a Moderation Variable: Scale in Berau Regency. Ilomata International Journal of Tax and Accounting, 5(1), 234-253. https://doi.org/10.52728/ijtc.v5i1.1043

References

  1. Adefolake, A. O., & Omodero, C. O. (2022). Tax revenue and economic growth in Nigeria. Cogent Business & Management, 9(1), 2115282. https://doi.org/10.1080/23311975.2022.2115282
  2. Adur, V. R. G. B., Apriyanto, G., & Sutriswanto, S. (2019). Impact of pure regional income (PAD), general allocation funds (DAU) and special allocation funds (DAK) toward capital expenditures and its impact on economic growth (case study of local government in Malang area). International Journal of Academic Research and Development, 4(6), 10-19.
  3. Alvaro, R. (2022). The effect of local revenue, general allocation fund, revenue sharing fund, specific allocation fund, and regional expenditures on economic growth in district regions of undeveloped regions. Jurnal Budget: Isu Dan Masalah Keuangan Negara, 7(2), 256-276. https://doi.org/10.22212/jbudget.v7i2.132
  4. Amalia, S., Wijaya, A., Darma, D. C., Maria, S., & Lestari, D. (2020). Underground economy: Teori dan catatan kelam. Medan: Kita Menulis.
  5. Amri, K., Masbar, R., Nazamuddin, B. S., & Aimon, H. (2023). Does tax effort moderate the effect of government expenditure on regional economic growth? A dynamic panel data evidence from Indonesia. Ekonomika, 102(2), 6-27. https://doi.org/10.15388/Ekon.2023.102.2.1
  6. Anggraini, D., Sudharyati, N., Pratiwi, R. D., & Selviana, N. R. (2023). Analisis determinan pertumbuhan ekonomi dari sisi pendapatan daerah di Provinsi Jambi selama tahun 2017-2021. Ekonomis: Journal of Economics and Business, 7(2), 1350-1356. http://dx.doi.org/10.33087/ekonomis.v7i2.1466
  7. Azizah, N., Kusuma, H., & Arifin, Z. (2022). Does fiscal decentralization increase the economic growth in Sulawesi Island?. Economics Development Analysis Journal, 11(1), 61-74. https://doi.org/10.15294/edaj.v11i1.49957
  8. Balasoiu, N., Chifu, I., & Oancea, M. (2023). Impact of direct taxation on economic growth: Empirical evidence based on panel data regression analysis at the level of EU Countries. Sustainability, 15(9), 7146. https://doi.org/10.3390/su15097146
  9. Basheer, M. F., Ahmad, A. A., & Hassan, S. G. (2019). Impact of economic and financial factors on tax revenue: Evidence from the Middle East countries. Accounting, 5(2), 53-60. https://doi.org/10.5267/j.ac.2018.8.001
  10. BPS-Statistics of Berau Regency. (2023). Berau regency in figures 2023. CV. Beraux, Tanjung Redeb.
  11. Brinkman, R. L., & Brinkman, J. E. (2011). GDP as a measure of progress and human development: A process of conceptual evolution. Journal of Economic Issues, 45(2), 447-456. https://doi.org/10.2307/23071523
  12. Buan, F. C. H., Fitriani, R., & Nurjannah, N. (2021). Estimating gross regional domestic product (GRDP) district/city in East Nusa Tenggara with spatial dynamic panel data. WACANA: Jurnal Sosial dan Humaniora, 24(4), 190-194.
  13. Cahyaning, S. (2018). The effect of regional original income, general allocation funds, and results sharing funds on capital expenditure allocation with economic growth as moderating variables in East Java Regency/City Government 2013-2015. JIET (Jurnal Ilmu Ekonomi Terapan), 3(1), 20–38. https://doi.org/10.20473/jiet.v3i1.7874
  14. Camões, P. J. (2020). Types of decentralisation and governance: Evidence from across the world. Journal of Public Affairs, 22(3), e2435. https://doi.org/10.1002/pa.2435
  15. Canare, T. (2021). Decentralization and development outcomes: What does the empirical literature really say?*. Hacienda Pública Española, 237(2), 111-151. https://dx.doi.org/10.7866/HPE-RPE.21.2.5
  16. Chairassamee, N., Hean, O., & Jabas, P. (2023). The financial impact of state tax regimes on local economies in the U.S. Journal of Risk and Financial Management, 16(10), 419. https://doi.org/10.3390/jrfm16100419
  17. Dragoi, D. (2020). Economic growth versus economic development. Atlantic Review of Economics, 3(1), 1-11.
  18. Easterlin, R. A. (2023). Why does happiness respond differently to an increase vs. decrease in income?. Journal of Economic Behavior & Organization, 209, 200-204. https://doi.org/10.1016/j.jebo.2023.03.005
  19. Goel, R. K., Mazhar, U., Nelson, M. A., & Ram, R. (2017). Different forms of decentralization and their impact on government performance: Micro-level evidence from 113 countries. Economic Modelling, 62, 171-183. https://doi.org/10.1016/j.econmod.2016.12.010
  20. Ha, N. M., Minh, P. T., & Binh, Q. M. Q. (2022). The determinants of tax revenue: A study of Southeast Asia. Cogent Economics & Finance, 10(1), 2026660. https://doi.org/10.1080/23322039.2022.2026660
  21. Holik, A. (2020). The impact of general allocation fund, special allocation fund, and profit-share fund on unemployment. Jejak, 13(1), 43-68. https://doi.org/10.15294/jejak.v13i1.19105
  22. Jaimovich, N., & Rebelo, S. (2017). Nonlinear effects of taxation on growth. Journal of Political Economy, 125(1), 265-291. https://doi.org/10.1086/689607
  23. Kaminitz, S. C. (2023). The significance of GDP: A new take on a century-old question. Journal of Economic Methodology, 30(1), 1–14. https://doi.org/10.1080/1350178X.2023.2167228
  24. Kapsos, S. (2006). The employment intensity of growth: trends and macroeconomic determinants. In: Felipe, J., Hasan, R. (eds) Labor Markets in Asia. Palgrave Macmillan, London. https://doi.org/10.1057/9780230627383_4
  25. King, P. S. (2013). Moderators/moderating factors. In: Gellman, M.D., Turner, J.R. (eds) Encyclopedia of Behavioral Medicine. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-1005-9_971
  26. Kurniana, W., Kurniani, W., Sepfiandy, I., & Gyovani, E. (2017). The impact of regional autonomy policy for economic growth in East Java. Jurnal Ekonomi dan Studi Pembangunan, 9(2), 219-230. http://dx.doi.org/10.17977/um002v9i22017p224
  27. Landefeld, J. S., Seskin, E. P., & Fraumeni, B. M. (2008). Taking the pulse of the economy: Measuring GDP. Journal of Economic Perspectives, 22(2), 193-216. https://doi.org/10.1257/jep.22.2.193
  28. Leamer, E. E. (2009). Gross domestic product. In: Macroeconomic Patterns and Stories. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-46389-4_2
  29. Lubis, J. M. (2023). Indonesian economic growth through tax and non-tax revenue mediated by good corporate governance. International Journal of Commerce and Management Research, 9(4), 74-79.
  30. Maganya, M. H. (2020). Tax revenue and economic growth in developing country: An autoregressive distribution lags approach. Central European Economic Journal, 7(54), 205-217. https://doi.org/10.2478/ceej-2020-0018
  31. Magill M. (2011). Moderators and mediators in social work research: Toward a more ecologically valid evidence base for practice. Journal of Social Work, 11(4), 387–401. https://doi.org/10.1177/1468017310379930
  32. Mahmood, T., & Ahmad, E. (2018). The relationship of energy intensity with economic growth: Evidence for European economies. Energy Strategy Reviews, 20, 90-98. https://doi.org/10.1016/j.esr.2018.02.002
  33. Matete R. E. (2022). Forms of decentralization and their implications for educational accountability in Tanzania. Heliyon, 8(5), e09436. https://doi.org/10.1016/j.heliyon.2022.e09436
  34. Nguyen, H. T., & Darsono, S. N. A. C. (2022). The impacts of tax revenue and investment on the economic growth in Southeast Asian Countries. Journal of Accounting and Investment, 23(1), 128-146. https://doi.org/10.18196/jai.v23i1.13270
  35. Nguyen, P. V., Vo, D. H., Tran, T. P-K., & Tran, N. P. (2022). Public spending and informal economy in the Asian countries. Cogent Economics & Finance, 10(1), 2101220. https://doi.org/10.1080/23322039.2022.2101220
  36. Nikolov, P., & Pasimeni, P. (2023). Fiscal stabilization in the United States: Lessons for monetary unions. Open Economies Review, 34(1), 113–153. https://doi.org/10.1007/s11079-022-09664-8
  37. Nkalu, C. N., & Agu, C. C. (2023). Fiscal policy and economic stabilization dynamics in Sub-Saharan Africa: A new evidence from panel VEC model and Hodrick-Prescott filter cyclical decomposition. SAGE Open, 13(2), 1–14. https://doi.org/10.1177/21582440231178261
  38. Nuraini, I., & Hariyani, H. F. (2019). Quality economic growth as an indicator of economic development. Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 20(1), 80-86. https://doi.org/10.23917/jep.v20i1.7104
  39. Ozmen, A. (2014). Notes to the concept of decentralization. European Scientific Journal, 10(10), 415-424.
  40. Pinem, A. A., Saleh, M., & Effendy, A. S. (2021). The effect of profit sharing fund, export value, capital expenditure investment in economic growth and unemployment in East Kalimantan. International Journal of Entrepreneurship and Business Development, 4(5), 689-699. https://doi.org/10.29138/ijebd.v4i5.1472
  41. Rahman, M. M., & Alam, K. (2021). Exploring the driving factors of economic growth in the world's largest economies. Heliyon, 7(5), e07109. https://doi.org/10.1016/j.heliyon.2021.e07109
  42. Ratnasari, S. L., Mahadi, N., Nordin, N. A., & Darma, D. C. (2022). Ethical work climate, social trust, and decision-making in Malaysian public administration: The case of MECD Malaysia. Croatian and Comparative Public Administration, 22(2), 289-312. https://doi.org/10.31297/hkju.22.2.3
  43. Roy, J., Suharto, R. B., & Awaluddin, M. (2020). Predictions on economic growth and regional spending in East Kalimantan Province: MRA Approach. Technology Reports of Kansai University, 62(10), 5787-5794.
  44. Roy, J., Wijaya, A., Darma, D. C., & Kurniawan, E. (2022). Fiscal decentralization and income inequality: A prediction using the SEM model. Journal of Economics, Business, & Accountancy Ventura, 24(3), 379–391. http://dx.doi.org/10.14414/jebav.v24i3.2681
  45. Salmawati, S., & Junaidi, J. (2023). The effect of government expenditure on economic growth in South Sulawesi. Fokus Bisnis Media Pengkajian Manajemen Dan Akuntansi, 22(1), 22–32. https://doi.org/10.32639/fokbis.v22i1.234
  46. Siddiquee, N. A., Nastiti, D., & Sejati, N. A. (2012). Regional autonomy and local resource mobilization in eastern Indonesia: Problems and pitfalls of fiscal decentralization. Asian Affairs: An American Review, 39(1), 44-68. https://doi.org/10.1080/00927678.2012.649636
  47. Sima, M., Liang, P., & Qingjie, Z. (2023). The impact of fiscal decentralization on economic growth: A comparative analysis of selected African and OECD countries. Heliyon, 9(9), e19520. https://doi.org/10.1016/j.heliyon.2023.e19520
  48. Söderlund, M. (2023). Moderator variables in consumer research: A call for caution. Journal of Retailing and Consumer Services, 73(1), 103352. https://doi.org/10.1016/j.jretconser.2023.103352
  49. Stoilova, D. (2017). Tax structure and economic growth: Evidence from the European Union. Contaduría y Administración, 62(3), 1041-1057. https://doi.org/10.1016/j.cya.2017.04.006
  50. Surjaningsih, N., Utari, G. A. D., & Trisnanto, B. (2012). THE impact of fiscal policy on the output and inflation. Buletin Ekonomi Moneter Dan Perbankan, 14(4), 367-396. https://doi.org/10.21098/bemp.v14i4.409
  51. Sulangi, P. G., Anwar, C., & Ulupui, I. G. K. A. (2022). The effect of general allocation funds, economic growth, and area on the level of financial independence of the provincial government regions in Indonesia. Jurnal Akuntansi, Perpajakan dan Auditing, 3(2), 344-354. https://doi.org/10.21009/japa.0302.05
  52. Susanto, W., & Sugianto, C. (2019). The structure of regional original revenue and its effect on economic growth: Facts from Regencies and Cities in Central Jawa. Jurnal Perencanaan Pembangunan, 3(1), 68–102. https://doi.org/10.36574/jpp.v3i1.59
  53. Tcherneva, P. R. (2012). The role of fiscal policy: Lessons from stabilization efforts in the United States during the great recession. International Journal of Political Economy, 41(2), 5-25. https://doi.org/10.2753/IJP0891-1916410201
  54. Tenrinippi, A. (2020). Understanding decentralization and regional autonomy policy towards the village autonomy. Meraja Journal, 3(1), 21-33. https://doi.org/10.33080/mrj.v3i1.82
  55. Undang, G., Heri, H., Suhendar, D., Nuryani, E., Sulaeman, A., Dhina, M. A., & Darmawan, A. (2023). Policy reformulation action-cycle framework (PRACYF): A case study decentralization and regional autonomy policy in North Sumatra Province. Jurnal Manajemen Pelayanan Publik, 6(2), 65-83. https://doi.org/10.24198/jmpp.v6i2.45021
  56. Wahyuni, A. S. (2020). Effect of original revenue income and funds general allocation of growth economy of Surakarta City. Journal of STEI Economics, 1(1), 1-21.
  57. Wijaya, A., Roy, J., & Darma, D. C. (2019). Why fiscal dynamics occur in Samarinda City?. Jurnal Ekonomi dan Studi Pembangunan, 11(2), 158-176. http://dx.doi.org/10.17977/um002v11i22019p158
  58. Wijayanti, T. C., Rahmawati, R., Sadaruddin, M. A. P., Johan, J., & Darma, D. C. (2022). Causality validation of three marketing mix components and interest in smartphone purchase decisions. Jurnal Sosioteknologi, 21(2), 182–194. https://doi.org/10.5614/sostek.itbj.2022.21.2.6
  59. Yanti, N., & Nurtati, N. (2020). Economic growth: Impact of locally-generated revenue and balance funds moderated by capital expenditure. Jurnal Pembangunan Nagari, 5(1), 40-54. https://doi.org/10.30559/jpn.v5i1.173
  60. Yushkov, A. (2015). Fiscal decentralization and regional economic growth: Theory, empirics, and the Russian experience. Russian Journal of Economics, 1(4), 404–418. https://doi.org/10.1016/j.ruje.2016.02.004
  61. Zeyneloğlu, İ., & Koenig, G. (2016). Recent economic developments and the implications for fiscal policy in open economy macroeconomics. Revue d'économie politique, 126(6), 1023-1056. https://doi.org/10.3917/redp.266.1023