The Effect of Financial Performance and Budget Ratcheting on Capital Expenditure Allocation in Districts/Cities of Central Java Province
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 02
Abstract
This study examines the effect of regional financial performance (effectiveness ratio, efficiency, fiscal decentralization) and budget ratcheting on the allocation of capital expenditure in local governments in Central Java Province from 2018-2021. The population in this study were all Regency/City Regional Governments in Central Java Province in 2018-2021. The sample used was 35 local governments. Hypothesis testing using panel data regression. The results showed that regional financial performance (effectiveness ratio, efficiency, fiscal decentralization) and budget ratcheting affect capital expenditure allocation. Effectiveness and efficiency ratios negatively affect capital expenditure allocation, fiscal decentralization ratio positively affects capital expenditure allocation, and budget ratcheting negatively affects capital expenditure allocation. This study provides empirical evidence that one of the tools to analyze regional financial performance in managing regional finances is to conduct a financial ratio analysis. The novelty of this research is the addition of budget ratcheting variables that have not been widely studied in Indonesia, especially those using local government objects.
Authors and Affiliations
1Fahtia Nur Hanifah, Jaka Winarna
Keywords
Related Articles
- EP ID EP730615
- DOI 10.47191/jefms/v7-i2-05
- Views 71
- Downloads 0
Professionalism, Quality of Human Resources, and Commitment as Performance Improvement Factors
This research aims to determine the quality of human resources, work professionalism, commitment and their influence on employee performance both partially and simultaneously. The research approach used in this research...
External Sector and The Nigerian Manufacturing Sector Performance, 1981-2019
No country is an island. The globalization phenomenon is making all countries to be interdependent. The external sector environment has become critical for the success of every country and internal balance. Thus, it has...
Unemployment Hysteresis in African Oil Exporting Countries: Evidence from Fourier Unit Root Test
This study investigates the stochastic properties of unemployment rate in top ten African oil exporting countries, by examining whether the high unemployment rate in these countries are mean reverting or non-stationary....
Assessing the Relationship between External Debt Financing and Gross Domestic Product in Ghana
The level of external debt of a country is of fundamental importance in every economy, as external debt may reflect the effectiveness and efficiency of an economy. The study was motivated by the ever-increasing rate at w...
The Effect of Teamwork and Organizational Commitment on Employee Performance
This research aims to analyze the effect of teamwork on employee performance, analyze the effect of organizational commitment on employee performance, and analyze the effect of teamwork and organizational commitment simu...