Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Analysis of Capital Expenditure and Economic

Growth of Bantaeng District
Kundarah1, Gagaring2, and Kusumawati3
123
Magister of Accounting, Faculty of Economic and Business
Hasanuddin University, Makassar, Indonesia.

Abstract:- The local government of Bantaeng Regency is capital expenditure to improve and complete infrastructure and
obliged to meet the vital needs of the community through facilities with the aim of achieving better economic growth.
development in various sectors. Development in each
public sector is carried out in stages and continuously Government revenue growth is strongly correlated with
according to the needs of the community so that it is government spending. In addition, the research of Hairiyah et
expected to be able to increase people's income, increase al. (2017) obtained the results that PAD and capital
local government income and at the same time be able to expenditures have a positive relationship. The higher the PAD
provide quality public services. This research can be of a region, the capital expenditures made by the regional
empirical evidence of how Regional Original Income, government also increase. Previous research also conducted by
General Allocation Funds, Special Allocation Funds, and Sugiarthi and Supadmi (2014) showed that PAD, DAU, and
Economic Growth in this study as moderating variables SiLPA had a positive and significant effect on capital
that affect capital expenditures, expenditure in districts/cities in Bali Province. The moderating
variable (economic growth) is able to moderate the PAD and
Keywords;- Bantaeng Regency; PAD; DAK; DAU. DAU variables.

I. INTRODUCTION This research refers to previous research conducted by

Juniawan and Suryantini (2018). The novelty of this research is
In accordance with the regulations of Law no. 23 of 2014 to use the same variable and add economic growth as a
concerning Regional Government which states that Regional moderating variable with a different research location, namely
Autonomy is the right, authority, and obligation to regulate and in Bantaeng Regency. The purpose of economic growth as a
manage the potential of the autonomous region itself, both moderating variable is to find out whether economic growth in
government affairs and the interests of the community in the Bntang District is able to strengthen or weaken the relationship
autonomous region. Research Paul et al. (2017) states that local between PAD, DAU, and DAK on capital expenditures.
governments are required to be able to explore their own Previous research used time series data for three years (2014-
financial sources in order to finance government, development 2016) but in this study using time series data for 12 (twelve)
and community administrators under their authority in the years from 2008 to 2019. As one of the autonomous regions in
context of implementing broad, real and responsible regional South Sulawesi Province, the local government of Bantaeng
autonomy. The central government delegates authority to local Regency is obliged to meet the vital needs of the community
governments accompanied by the allocation of funds, facilities through development in various sectors in meeting public
and infrastructure as well as Human Resources (HR). This is facilities and infrastructure, although development is carried
realized in the form of balancing funds, namely the Special out in stages from year to year. In public sector accounting,
Allocation Fund (DAK). Law No. 33 of 2004 states a special these regional infrastructure development activities are known
allocation fund. Utilization of special allocation funds is as Capital Expenditures. This is in accordance with what is
directed at development activities, procurement, improvement stated in Permendagri No. 13 of 2006 in conjunction with
and repair of physical infrastructure facilities in order to Permendagri No. 59 of 2007 concerning Guidelines for
improve and support better public services. With the allocation Regional Financial Management. This is in accordance with
of special allocation funds, it is expected to affect capital what is stated in Permendagri No. 13 of 2006 in conjunction
expenditures, because special allocation funds tend to add to with Permendagri No. 59 of 2007 concerning Guidelines for
the appropriate assets owned by the government in order to Regional Financial Management. This is in accordance with
improve public services. what is stated in Permendagri No. 13 of 2006 in conjunction
with Permendagri No. 59 of 2007 concerning Guidelines for
Economic growth is still used as an indicator of aggregate Regional Financial Management.
economic progress. Economic growth is a parameter of a
development activity, this is because economic growth can Based on descriptions of various reference sources and
measure the level of activity development in economic sectors research that has been carried out by previous researchers, the
in an economy (Nuraini, 2017). Economic growth is defined as objectives of this study are as follows.
a condition of activity in the economy that causes the  Analyzing the effect of Regional Original Income (PAD)
production of goods and services to increase so that there is an on Capital Expenditures in Bantaeng Regency.
increase in people's prosperity. If the economic growth of a  Analyzing the effect of the General Allocation Fund (DAU)
region is increasing, the regional government will increase its on Capital Expenditures in Bantaeng Regency.

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Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
 Analyzing the effect of the Special Allocation Fund (DAK) Allocation Fund (DAK) shows that the minimum value is Rp.
on Capital Expenditures in Bantaeng Regency. 30,458,900,000, and the maximum value is Rp.
 Analyzing Economic Growth as a moderating variable can 351,379,687,407. The value of the standard deviation of the
strengthen the influence of Regional Original Income DAK variable is 104302684954.
(PAD) on Capital Expenditures in Bantaeng Regency.
 Analyzing Economic Growth as a moderating variable can The description for the moderating variable and
strengthen the influence of the General Allocation Fund dependent variable based on the table shows that the minimum
(DAU) on Capital Expenditures in Bantaeng Regency. value for the variable Economic Growth (Z_PE) is 6.64, the
 Analyzing Economic Growth as a moderating variable can maximum value for that variable is 10.75 and the standard
strengthen the influence of the Special Allocation Fund deviation is 1.09. Meanwhile, the dependent variable has a
(DAK) on Capital Expenditures in Bantaeng Regency. minimum value of Rp. 76,192,637,468, the maximum value is
Rp. 386,135,912,238 and the standard deviation is
II. RESEARCH METHODS 91014972612.

A. Research design Table 1 Descriptive statistics

X1_PAD X2_DAU X3_DAK Z_PE Y_BM
This study uses a quantitative approach, because this
Mean 44350487297,80 381706759310,00 116799853819,92 8,01 164127330278,87
research is presented with numbers. According to Sugiyono Standard
Error 9435185047,32 32923113241,80 30109591617,95 0,32 26273759468,95
(2017), the notion of quantitative methods is a method based Median 34402562479,80 402017108500,00 50501060000,00 7,91 127262105671,50
on the philosophy of positivism used to examine a particular Standard
Deviation 32684439761,56 114049009756,27 104302684954,87 1,09 91014972612,14
population or sample, data collection using research Kurtosis -0,46 -1,69 0,69 2,97 2,11

instruments, statistical data analysis, which aims to test Skewness 0,85 -0,20 1,23 1,33 1,51
Range 96058388317,65 304172351000,00 320920787407,00 4,11 309943274770,00
hypotheses. This research was conducted to explain and test the Minimum 11084858781,34 224668231000,00 30458900000,00 6,64 76192637468,00
relationship between variables, determine causality of the Maximum 107143247098,99 528840582000,00 351379687407,00 10,75 386135912238,00

variables, test theories and look for generalizations that have Sum 532205847573,63 4580481111720,00 1401598245839,00 96,11 1969527963346,42
Count 12,00 12,00 12,00 12,00 12,00
predictive value (to predict a symptom). Confidence
Level(95,0%) 20766702271,88 72463283669,21 66270764327,52 0,69 57828154690,99

This study uses 5 (five) variables, namely 3 (three)

independent variables, 1 (one) dependent variable, and 1 (one) The selection of the best form of function model is done
moderating variable. The dependent variable in this study is by using the MWD Test which was found by Mackinnon,
Capital Expenditure. The independent variables in this study White and Davidson. The MWD test aims to compare the
are Local Original Income, General Allocation Funds, and regression model and the log linear regression model so as to
Special Allocation Funds. This study aims to see the effect of get the best linear regression results. The MWD test results for
the 3 (three) independent variables on the dependent variable, linear models based on calculations using Eviews are as
and to see the effect of economic growth as a moderating follows.
variable. The population of this study is the Regional
Government Financial Statements of the Bantaeng Regency Table 2 MWD Test Estimation Results for Linear Model
with the research sample namely the Budget Realization Report
Variable Coefficient Std. Error t-Statistic Prob.
within a span of twelve years, from 2008 to 2019.
C 5.92E+10 7.82E+10 0.757476 0.4735
X1_PAD -0.335265 1.604540 -0.208948 0.8404
X2_DAU 0.057235 0.314010 0.182270 0.8605
III. RESEARCH RESULT X3_DAK 0.841909 0.416457 2.021598 0.0829
Z1 -2.31E+10 3.23E+11 -0.071471 0.9450

A. Descriptive Statistical Analysis of Research Variables R-squared 0.835644 Mean dependent var 1.64E+11
Adjusted R-squared 0.741727 S.D. dependent var 9.10E+10
Table 5.1 above describes a description of the variables S.E. of regression 4.63E+10 Akaike info criterion 52.24706
Sum squared resid 1.50E+22 Schwarz criterion 52.44910
used in this study. The minimum value is the smallest value of Log likelihood -308.4823 Hannan-Quinn criter. 52.17225
F-statistic 8.897649 Durbin-Watson stat 2.773185
a series of observations, the maximum value is the largest value Prob(F-statistic) 0.007064
of a series of observations, the average value (mean) is the sum
of the values of all data divided by the number of data. Meanwhile, the results of the MWD log linear model
Meanwhile, the standard deviation is the root of the sum of the based on calculations using Eviews are as follows.
squares of the difference between the data values and the
average divided by the number of data. Table 3 MWD Test Estimation Results for Linear Log Model
Variabel Coefficient Std. Error t-Statistic Prob.
Based on the table, it is known for each independent
variable that the Regional Original Income (X1_PAD) of C 35.94685 18.21650 1.973313 0.0891
LOG_X1PAD 0.918812 0.624607 1.471025 0.1848
Bantaeng Regency has a minimum value of Rp. LOG_X2DAU -1.240220 1.017964 -1.218333 0.2626
LOG_X3DAK 0.017751 0.329359 0.053896 0.9585
11,084,858,781 and the maximum value is Rp. Z2 -9.51E-12 5.99E-12 -1.588004 0.1563
107,143,247,098. While the value of the standard deviation of
R-squared 0.816356 Mean dependent var 25.70616
the PAD variable is 32684439761. Meanwhile for the General Adjusted R-squared 0.711416 S.D. dependent var 0.488473
S.E. of regression 0.262408 Akaike info criterion 0.456502
Allocation Fund (X2_DAU) variable, Bantaeng Regency has a Sum squared resid 0.482005 Schwarz criterion 0.658547
minimum value of Rp. 224,668,231,000 and a maximum value Log likelihood 2.260985 Hannan-Quinn criter. 0.381698
F-statistic 7.779288 Durbin-Watson stat 2.766224
of Rp. 528,840,582,000. The value of the standard deviation of Prob(F-statistic) 0.010238
the DAU is 114049009756. The next variable for the Special

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Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
From the results of the MWD test for the linear model and From the results of the analysis using the Jarque-Bera test,
the log linear model, the probability value for each estimated it shows that the probability value for Jarque-Bera is 0.228.
MWD value for the Z1 variable is 0.945 > 0.05 and for the Z2 This shows that the probability value of the Jarque-Bera
variable is 0.156 > 0.05. Therefore, it can be concluded that statistic is greater than the alpha value of 0.05, so it can be
both models can be used in research. Because both models can concluded that the research data is normally distributed. Or in
be used in research, to determine the use of one of these models other words, that the research data passed the normality test.
is based on the largest R-squared value of each model. From
the results of the MWD test, the R-squared value for the linear Testing of the symptoms of heteroscedasticity in a model
model is 0.835 and 0.816 for the log linear model. Therefore, can be done in various ways, such as the Glejser test, White test
in this study the model used for further analysis is to use a linear and the Breusch-Pagan-Godfrey (BPG) test. In this study, the
model because it has a larger R-squared value. heteroscedasticity test was carried out using the BPG test. An
indication of the occurrence of heteroscedasticity problems is
Multicollinearity testing is done by looking at the by looking at the probability value of the independent variables
tolerance value or Variance Inflation Vactor (VIF) in the used in the model. If the probability value of Obs* R-Squared
regression model. In this study, the researcher uses the VIF based on the results of the analysis is below the alpha (α) value
value to test whether the regression model violates the of 5% (0.05), it is stated that the model has heteroscedasticity
multicollinearity assumption or not. If the VIF value is less than problems. Meanwhile, if the probability value of Obs* R-
10, it can be concluded that there is no multicollinearity Squared based on the results of the analysis is above the alpha
problem in the regression model. The results of the (α) value of 5% (0.05), it is stated that the model does not
multicollinearity test that have been carried out by comparing experience heteroscedasticity problems. The results of the BPG
the VIF values in table 5.5. Based on the table on the results of test can be shown in table 5.7 below. From the table of BPG
the multicollinearity test above, it shows that the VIF value for test results above, it shows that the probability value for Obs*
the PAD variable is 6.377, for the DAU variable is 5.901 and R-Squared is 0.474 > 0.05. So it can be concluded that there is
the DAK variable is 2.979. From the results of the no heteroscedasticity problem in the research model because
multicollinearity test for the three variables, it shows that each the calculated probability value is greater than the alpha (α)
variable has a VIF value < 10. value.

Table 4 Multicollinearity Test Results Table 7 Breusch-Pagan-Godfrey Test Results

Heteroskedasticity Test: Breusch-Pagan-Godfrey
Coefficient Uncentered Centered
F-statistic 0.703413 Prob. F(3,8) 0.5762
Variabel Variance VIF VIF Obs*R-squared 2.504677 Prob. Chi-Square(3) 0.4744
Scaled explained SS 1.671766 Prob. Chi-Square(3) 0.6432
C 4.95E+21 31.73826 NA
X1_PAD 1.016794 19.18886 6.377908 Test Equation:
X2_DAU 0.077266 78.01155 5.901100 Dependent Variabel: RESID^2
Method: Least Squares
X3_DAK 0.046637 7.054427 2.979081 Date: 06/12/21 Time: 23:39
Sample: 2008 2019
Included observations: 12
Normality testing in this study was carried out using the Variabel Coefficient Std. Error t-Statistic Prob.
Jarque-Bera test. This measurement can be detected through
C -3.80E+21 3.84E+21 -0.989732 0.3513
the probability value of Jarque-Bera. If the probability value is X1_PAD -6.06E+10 5.49E+10 -1.103381 0.3019
smaller than the alpha value of 5% (0.05), it can be concluded X2_DAU 1.93E+10 1.51E+10 1.272817 0.2388
X3_DAK 3.21E+09 1.18E+10 0.273086 0.7917
that there is a problem with abnormal data distribution. On the
R-squared 0.208723 Mean dependent var 1.25E+21
other hand, if the probability value is greater than 5% alpha Adjusted R-squared -0.088006 S.D. dependent var 2.26E+21
(0.05), it can be concluded that the data is normally distributed. S.E. of regression 2.36E+21 Akaike info criterion 101.5234
Sum squared resid 4.45E+43 Schwarz criterion 101.6850
Based on the analysis, the results obtained by Jarque-Bera are Log likelihood -605.1403 Hannan-Quinn criter. 101.4635
as follows: F-statistic
Prob(F-statistic)
0.703413
0.576169
Durbin-Watson stat 2.797129

Table 6 Normality Test Results

Autocorrelation testing in a research model can be done
using several statistical comparison values, including by
looking at the Durbin Watson Statistics value in the regression
analysis results and also using the Breusch-Godfre Serial
Correlation LM Test. In this study, the autocorrelation test was
carried out using the Breusch-Godfrey Serial Correlation LM
Test, the following are the results.

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Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
Table 8 Breusch-Godfrey Serial Correlation LM Test Results value is 0.810 > 0.05. In addition, the coefficient value for the
Breusch-Godfrey Serial Correlation LM Test:
Regional Original Income variable is 0.250 and is negative. It
F-statistic 1.829295 Prob. F(2,6) 0.2101 can be concluded that, Regional Original Income does not
Obs*R-squared 5.408758 Prob. Chi-Square(2) 0.1091
significantly affect Capital Expenditures. In other words, the
Test Equation: proposed hypothesis, namely Regional Original Income does
Dependent Variabel: RESID
Method: Least Squares not have a positive effect on Capital Expenditures, is accepted.
Date: 06/12/21 Time: 23:07
Sample: 2008 2019
Included observations: 12 C. General Allocation Fund affects Capital Expenditure
Presample missing value lagged residuals set to zero.
By looking at the test results in the table above, the
Variable Coefficient Std. Error t-Statistic Prob. calculated t value for the General Allocation Fund variable is
C 6.72E+10 4.14E+10 1.620815 0.1562 0.179 at a significance level of 0.861. The t value for this
X1_PAD 0.934670 0.481862 1.837335 0.2297 variable is < from the t table value of 2.262 with a probability
X2_DAU -0.286442 0.167556 -1.709530 0.1382
X3_DAK -0.368049 0.161868 -2.273759 0.0633 value of 0.861 > 0.05. Meanwhile, the coefficient value on the
RESID(-1) -1.230767 0.295514 -1.164836 0.2059
RESID(-2) -1.886435 0.345878 -1.605183 0.3113
General Allocation Fund variable is 0.049. Based on these
results, it can be concluded that the General Allocation Fund
R-squared 0.484063 Mean dependent var 2.53E-05
Adjusted R-squared 0.304116 S.D. dependent var 1.69E+10 has no significant effect on Capital Expenditures. This means
S.E. of regression 1.32E+10 Akaike info criterion 0.881682 that the second hypothesis proposed, namely the General
Sum squared resid 1.24E+21 Schwarz criterion 1.124104
Log likelihood 2.290167 Hannan-Quinn criter. 0.791912 Allocation Fund has no positive effect on Capital
F-statistic 0.757180 Durbin-Watson stat 2.284206
Prob(F-statistic) 0.650741
Expenditures, is accepted.

D. Special Allocation Funds affect Capital Expenditure

In the table above, it can be seen that the t value for the
Based on the results of the Breusch-Godfrey Serial Special Allocation Fund variable is 3.783 at a significance
Correlation LM Test in the table above, it shows that the level of 0.00. If it is compared with the t table value, then the
probability value of Obs*R-Squared is 0.109 > 0.05. This calculated t value is 3.783 > 2.262 at the probability level
shows that there is no autocorrelation symptom so that the compared to the alpha value, which is 0.00 < 0.05. This shows
analysis can be carried out at a later stage. that the Special Allocation Fund variable has a significant
effect on the Capital Expenditure variable.
Testing for several hypotheses is done by using the
regression equation in paris. In this case, all research variables The coefficient value for the Special Allocation Fund
used are data that have been transformed before must meet the variable is 0.817. This means, if there is an increase of one unit
feasibility of the model based on the classical assumption test. for the Special Allocation Fund variable with the assumption
This partial test is used to test the effect of each independent that the Regional Original Revenue and General Allocation
variable on the dependent variable. If t count > t table then Fund variables are considered constant, then Capital
reject H0 and it can be concluded that the independent variable Expenditure will increase by 0.817 units. On this basis, the
significantly affects the dependent variable. However, if t count third hypothesis proposed in this study, namely the Special
< t table then accept H0, which means that there is no Allocation Fund has an effect on Capital Expenditures, is
significant effect of the independent variable on the dependent accepted.
variable. Or you can also use a probability value that is
compared with an alpha value of 5% (0.05). If probability value After testing the moderation with the moderating
< 5% then the result is significant and it can be stated that there variable (interaction between Regional Original Income
is an influence of the independent variable on the dependent multiplied by Economic Growth), the statistical results are
variable. The following are the results of the partial test in this obtained as follows.
study.
Table 10 PAD Variable MRA Test Results
Table 9 Partial Test Results (t Test) Dependent Variable: Y_BM
Variabel Coefficient Std. Error t-Statistic Prob. Variable Coefficient Std. Error t-Statistic Prob.
C 6.07E+10 7.04E+10 0.862578 0.4135 C 4.49E+10 3.80E+11 0.118323 0.9087
X1_PAD -0.250297 1.008362 -0.248222 0.8102 X1_PAD 4.091592 5.099376 0.802371 0.4455
X2_DAU 0.049959 0.277967 0.179730 0.8618
Z_PE 2.58E+09 4.75E+10 0.054403 0.9579
X3_DAK 0.817132 0.215955 3.783801 0.0054
INTERAKSI_1 -0.224942 0.596409 -0.377160 0.7159

R-squared 0.546951 Mean dependent var 1.64E+11

Adjusted R-squared 0.377058 S.D. dependent var 9.10E+10
Based on the results of the partial test in the table above, S.E. of regression 7.18E+10 Akaike info criterion 53.09436
it can be explained for each hypothesis as follows. Sum squared resid 4.13E+22 Schwarz criterion 53.25599
Log likelihood -314.5661 Hannan-Quinn criter. 53.03451
F-statistic 3.219381 Durbin-Watson stat 2.524489
B. Local Original Income affects Capital Expenditure Prob(F-statistic) 0.082650
From the results of the analysis in the table above, it
shows that the t value for the Regional Original Income
variable is 0.248 with a significance level of 0.810. The
calculated t value is 0.248 < t table is 2.262, and the probability

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Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology
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C. Discussion Utilization of special allocation funds in Bantaeng
This study gives the result that local revenue does not Regency is directed at development activities, procurement,
affect capital expenditure in Bantaeng Regency as the object of improvement and improvement of physical infrastructure
research. This shows that partially the expenditure facilities in order to improve and support better public services.
management pattern of the Bantaeng district government, The fact is that in the last few years, especially from 2008 to
especially related to capital expenditure, does not really 2019 DAK has been realized 100% with various developments
consider PAD as one of the main determinants in the allocation for the public interest which continue to be adjusted to the
of capital expenditures, but the use of PAD is more for routine conditions and needs of the community, of course this
regional expenditure operations. development remains in line with national development goals.
It can be said that the local government of Bantaeng Regency
The results of this study are in line with the theory of has optimized good financial governance, especially for DAK
Public Expenditure where the purpose of public expenditure is allocations so that development priorities in the regions and the
to finance government administration or routine expenditures center can go hand in hand.
and partly to finance development activities or development
expenditures. In other words, if there is regional income, the Related to the theory of Public Expenditure itself, that the
priority is for daily operational needs/routine local government allocation of central transfer funds, namely DAK, has been in
expenditures. accordance with its designation which aims to fund various
development activities, especially for the benefit of the wider
The results of this study strengthen the results of research community. Public Expenditure which reflects the government
presented by Putri (2016) and Hidayati (2016) which state that setting a policy to buy goods and services, routine expenditure
PAD is used more to finance other expenditures, such as or capital expenditure, costs that must be incurred by the
routine expenditures/operational expenditures. In addition, the government to implement the policy.
increase in the capital expenditure budget depends on the
situation and condition of each region. However, the results of The results of this study are also in line with the research
this study are not in line with the results of research conducted of Susanti and Fahlevi (2016), Putri (2016), Hidayati (2016),
by Susanti and Fahlevi (2016), Purbarini and Masdjojo (2015), Permatasai and Mildawati (2016), and Pradana and Handayani
Edwin (2014) and Mayasari et al. (2014) which suggests that (2017), which suggest the positive influence of the Special
PAD has a positive effect on Capital Expenditures which Location Fund on Capital Expenditures. Likewise, Juniawan
results in a positive and significant effect of regional original and Suryantini (2018) state that the higher the DAK grant, the
income on capital expenditures. higher the Capital Expenditure will also be in relation to
development that is uniform with the national program.
The DAU has no effect on Capital Expenditures in
Bantaeng Regency because of an indication that the DAU is However, the findings of this study are different from
mostly used to finance personnel expenditures followed by those of Sudrajat and Purniawati (2017), Syukri and Hinaya
routine expenditures. This is due to the management of the (2019), which show that the Special Allocation Fund does not
DAU, which mostly funds monthly personnel expenditures that have a direct influence on the allocation of regional capital
must be issued by the local government. DAU allocations for expenditures. Thus, Febriana and Paptoyo (2015), Huda and
regions with large fiscal potential but small fiscal needs will Sumiati (2019) stated that through the allocation of balancing
receive relatively small DAU allocations. On the other hand, funds in the form of regional expenditure allocations for both
regions with small fiscal potential but large fiscal needs will routine and capital expenditures, local governments should be
receive relatively large DAU allocations. This confirms the able to determine the priority scale in the budget allocation so
function of the DAU as a factor for equitable distribution of that basic public service facilities and infrastructure that have
fiscal capacity in local governments. not reached a certain standard or to encourage accelerated
development through capital expenditures. The variable of
The results of this study are in line with the results of Economic Growth is not significantly related to the variable of
research by Syukri and Hinaya (2019), Sumartini and Yasa Capital Expenditure. This happens because economic growth
(2015), Pradana and Handayani (2017) which state that the in Bantaeng Regency is sometimes not always accompanied by
DAU has no significant effect on capital expenditures. With an increase in existing capital expenditures, allegedly
this transfer of balancing funds, it is hoped that local influenced by the Bantaeng Regency Original Income factor
governments can create independence instead of tending to which is only used to finance activities or routine needs of the
depend on transfer funds from the central government. local government. Although from audited financial report data
from 2008 to 2019 PAD continues to increase from year to
On the other hand, the results of this study are not in line year. Associated with the theory of fiscal federalism states that
with Juniawan and Suryantini (2018), Surajat and Purniawati economic growth will be achieved through fiscal
(2017), Hidayati (2016), and Putri (2016) who state that the decentralization. Bantaeng Regency has tried to run it by
General Allocation Fund has a positive influence on capital exploring potential financial sources that it has to finance
expenditure allocation. Juniawan and Suryantini (2018) regional needs, not only for routine government needs but also
suggest that in Bali Province with high PAD, so that DAU expected to finance capital expenditure needs.
transfers from the central government can be focused on
funding local government activities or programs through The results of this study are in line with the results of
regional expenditures, especially capital expenditures. Hidayati (2016) and Mulyani (2017) research. that economic
growth has no effect and cannot moderate the influence of PAD

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Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
on Capital Expenditures. In contrast to research conducted by The results of this study are in line with research by
Masruroh (2018), it is stated that Economic Growth strengthens Hidayati (2016), and Pratama (2019) that Economic Growth
the influence of PAD on Capital Expenditures, with increasing cannot moderate the Special Allocation Fund for Capital
regional economic growth which has an impact on increasing Expenditures.
the income per capita of the population, so that the level of
consumption and productivity of the population is increasing As for the theory of Fiscal Federalism that economic
so that the higher the community's ability to pay taxes set by growth is obtained by fiscal decentralization, namely through
the local government. the implementation of regional autonomy. From here, local
governments determine the direction of their development
Economic growth does not have a positive contribution to policies and keep them in line with national development goals,
Capital Expenditure so this has an impact on the relationship as well as trying to show how the influence of decentralization
between DAU and Capital Expenditure. Although the carried out by the government by providing various services to
economic growth of Bantaeng Regency is quite good, this the general public.
cannot be an indicator of the allocation of the General
Allocation Fund for Capital Expenditures. This is because the IV. CONCLUSION
use of the DAU is handed over to the regional government so
that the funds are prioritized to finance routine needs, the Based on the results of hypothesis testing and discussion
largest portion of which every month is personnel expenditure. of the analysis of Capital Expenditures and Economic Growth
in Bantaeng Regency, the following conclusions can be drawn.
In accordance with the theory of Fiscal Federalism that  The results of the test show that local revenue has no effect
economic growth is obtained by fiscal decentralization, namely on capital expenditures. This indicates that the higher the
through the implementation of regional autonomy and seeks to local revenue, the lower the capital expenditure.
show how the influence of decentralization carried out by the  The results of the general allocation fund variable test show
government by providing various services to the general public that it has no effect on capital expenditures. This result
and for the welfare of the community. So the transfer funds indicates that the higher the general allocation fund, the
from the center are given to the regions as well as the authority lower the capital expenditure.
to use these funds.  The results of the special allocation fund variable test show
that there is a positive influence on capital expenditures.
The results of this study are in line with Mulyani (2017), These results indicate that special allocation funds
Masruroh (2018), Cahyaning (2018), and Pratama (2019) that contribute to capital expenditures, the higher the special
the function of the General Allocation Fund to neutralize the allocation funds, the more capital expenditures will be.
inequality of financial ability obtained by the regions causes
regional independence to not get better, in fact what happens is  The value of the regression coefficient shows that the
that on the other hand, it is the regional government that relies variable economic growth does not interact on the effect of
on its regional finances with the existence of this General local revenue on capital expenditures. These results indicate
Allocation Fund. However, research conducted by Hidayati that economic growth is not able to moderate the effect of
(2016) states that economic growth has an effect and can local revenue on capital expenditures.
moderate the relationship between DAU and capital  The value of the regression coefficient shows that the
expenditure allocation. In this case, the capital expenditure variable economic growth does not interact with the effect
carried out by the regional government for the procurement of of local revenue on capital expenditures. These results
infrastructure is aimed at improving the welfare of the indicate that economic growth is not able to moderate the
community. effect of local revenue on capital expenditures.
 The value of the regression coefficient shows that the
Capital expenditure carried out by the local government variable economic growth does not interact on the effect of
of Bantaeng Regency is intended to fulfill infrastructure, local revenue on capital expenditures. These results indicate
facilities and infrastructure for the community which aims to that economic growth is not able to moderate the effect of
increase economic growth because economic growth is one local revenue on capital expenditures.
indicator that can be used as a measure to assess the success of
regional development. If a region has experienced increased The implications that arise are as follows.
economic growth, the regional government will reduce the
 This research is expected to increase knowledge about
allocation of capital expenditures and use the DAK for special
Regional Original Income, General Allocation Funds,
activities that are regional affairs and in accordance with other Special Allocation Funds and economic growth in local
national priorities besides capital expenditures. This is because governments. Therefore, in order to further explore what
the local government's goal of making capital expenditures, other factors also influence the allocation of capital
namely to increase economic growth, has been achieved. expenditures, further research is necessary.
Therefore, economic growth has a significant effect but
 The Regional Government should continue to restructure
weakens the influence of DAK on capital expenditures. It can
human resources in order to reduce personnel expenditures
be interpreted, that the higher the economic growth, the
and prioritize budget allocations to capital expenditures
influence of DAK on capital expenditure will decrease.
which will have an impact on improving people's welfare.

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Volume 6, Issue 11, November – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
 Local governments can further optimize the use of PAD, [9]. Putri, Kuntamini Suryani. 2016. The Effect of Economic
DAU, and DAK in order to further improve the Growth, Regional Original Income, General Allocation
development of infrastructure and public facilities and Funds, and Special Allocation Funds on Capital
infrastructure that are better, targeted and adequate through Expenditure Allocation (study on District/City
capital expenditures, because this will greatly affect Governments in Central Java in 2011 – 2013). Faculty of
productivity and improve the welfare of the community in Economics and Business. Muhammadiyah Surakarta
order to improve productivity. regional economic growth. university.
 Regional governments develop more potential in the [10]. Hidayati, Nurin. 2016. Analysis of the Effect of Pad, Dau
regional economic sector in order to increase regional and Dak on Capital Expenditure Allocation with
revenues, so as to create increased regional independence Economic Growth as a Moderating Variable in
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ACKNOWLEDGMENT Revenue Sharing Funds on Capital Expenditures (Studies
in Regencies/Cities in the Aceh Region. Scientific Journal
The preferred spelling of the word “acknowledgment” in of Accounting Economics Students (JMEKA) Vol. 1 No.
America is without an “e” after the “g.” Avoid the stilted 1 Page 183-191.
expression “one of us (RBG) thanks ...”. Instead, try “RBG [12]. Purbarini, Endah., and Masdjojo, Gregorius N. 2015.
thanks...”. Put sponsor acknowledgments in the unnumbered Flypaper Effect Tracer On Operating Expenditure and
footnote on the first page. Capital Expenditure of City Government in Indonesia.
South East Asia Journal of Contemporary Business,
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