Regional Original Revenue (ROI) is revenue sourced from the region itself, consisting of regional tax revenues, regional levies, the results of regionally-owned companies, the results of the management of separated regional assets, and other legitimate regional income. The General Allocation Fund (DAU) is a transfer from the central government sourced from the State Budget (APBN) allocated to meet regional needs and implement fiscal decentralization. Modal Expenditure (MoD) is government spending made to increase assets or investments that provide benefits for more than one accounting period. Economic growth indicates the extent to which economic activity will generate additional public income in a given period.
This study aims to determine the effect of Regional Original Revenue (ROI), General Allocation Fund (DAU), and Capital Expenditure on Economic Growth in regencies/cities in East Java. This research is quantitative, using Regional Original Revenue (ROI), General Allocation Fund (DAU), and Modal Expenditure as variables sourced from the Ministry of Finance's Directorate General of Taxes and Taxes Financial Report, and Economic Growth from the East Java Statistics Agency (BPS). This study uses panel data for the period 2018–2024. Data processing was performed using EViews 13 software and employed classical assumption tests, panel data regression analysis, hypothesis testing, including t-tests, f-tests, and coefficients of determination.
The results show that: 1) Regional Original Revenue has a positive effect on Economic Growth in Regencies/Cities in East Java, 2) General Allocation Funds have a negative effect on Economic Growth in Regencies/Cities in East Java, 3) Capital Expenditure has a positive effect on Economic Growth in Regencies/Cities in East Java, 4) Regional Original Revenue, General Allocation Funds, and Modal Expenditure simultaneously have no effect on Economic Growth in Regencies/Cities in East Java, 5) The coefficient of determination shows that the independent variable explains 20.8 percent of the dependent variable, with the remaining 79.2 percent explained by other variables not examined.
Keywords: Regional Original Revenue, General Allocation Funds, Capital Expenditure, Economic Growth