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Journal : META - JOURNAL

The Effect Of Local Original Income, Public Consumption And Government Expenditure On Economic Growth In Indonesia: Panel Data Analysis 2014-2023 Wasahua, Olos; Sumaryoto; Karno
Maksimal Jurnal : Jurnal Ilmiah Bidang Sosial, Ekonomi, Budaya, Teknologi, Dan Pendidikan Vol 3 No 3 (2026): On Progress
Publisher : Abadi Institute

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.59971/meta-journal.v3i3.404

Abstract

Indonesia’s provincial economic development relies on strengthening regional fiscal capacity, sustaining domestic consumption, and improving the efficiency of productive government spending. This study analyzes the simultaneous impact of real per-capita Local Own-Source Revenue (PAD), household consumption, and regional government productive expenditure (GOV_EXP) on provincial economic growth across 34 provinces over 2014–2023, using a balanced dynamic panel regression with the Fixed Effect Model (FEM) as the main estimator. Prior to modeling, all independent variables achieved stationarity at the second difference, allowing stable panel estimation. Findings from FEM indicate that PAD (β = 0.082; t = 22.36; p = 0.000) provides the strongest positive growth effect, followed by household consumption (β = 0.043; t = 10.88; p = 0.000), and productive expenditure (β = 0.032; t = 7.46; p = 0.000), all statistically significant at α < 0.05. Results confirm that while productive public spending contributes to provincial GDP expansion, its growth elasticity remains more moderate relative to PAD and consumption, suggesting persistent regional fiscal efficiency challenges even in economically enabling sectors. The model also demonstrates that growth is demand-driven and regionally persistent, emphasizing that the synergy of fiscal autonomy and domestic purchasing momentum, rather than budget size alone, drives sustainable economic progress. Policy implications support digital fiscal transformation, optimized capital allocation, and consumption-supporting regional strategies to accelerate equitable and resilient provincial growth.
Co-Authors A Rijal Nurhalim Abdullah, Farid Wajedi Agnes Jatu Resani Seno Ahdiyat, Maman Alan Ksatrya Bhuana Alimin, Soni Amat Suparman Santoso Anna Nurfarkhana Anna Nurfarkhana Anwar Sanusi Aprillia, Rosida Ardian, Riki Ardiyanti, Devi Arie Irfan Nuri Atikah Atikah Azzahra Siti Ramadan Bado Riyono Bado Riyono Bado Riyono Bambang Sumadyo Burhani, Ahmad Dahayati Dahayati Daniel Yohanes Indrasakti Darwati Susilastuti Dewi, Lia Oktiana Dian Ratnasari Asrori Dirdjo, Budiyono Djaka Maulana Dony Krisna Edoh, Nur Edson Sahulatta Eulis Kulsum Halwati Falgenti, Kursehi Ghaisani, Nadhilah Goessera Putri Rusdiana Gumilang, Muhammad Shirli Gunadiputra, Ilhamy Ilyas Habibi, Ahmad Hanifah, Nani Hapsari, Sri Hasanah, Uswatun Hasbullah Hendro Prasetyono Heny Astuty Heru Sriyono Heru Sriyono Heru Suparman Hugo Aries Suprapto Iis Aisah Inayah, Inna Nur Indra Sutisna Januar Barkah Julia, Rani Karno Khairil Khairil Kis Andayani Komaida, Dian Kurniawan, Andreas Leli Yuliana Lenny Marlina Lisna Ningrum Lulu&#039; Ur Rohmah Lumbantobing, Samuel Vincent Lusie Charina Mai, Chandra Maman Achdiyat Maman Ahdiyat Mamiek Suendarti Mamik Suendarti Marwi Marwi Masayu Endang Apriyanti Masrin Masrin Meirinaldi Meirinaldi Miftahullah Bisi Muhamad Bili Fatullah Muhammad Rozali Muniroh, Siti Soimatun N Yanti Sumiati Nardiyanto, Nardiyanto Nita, Ervina Willia Nur&#039;aina Ibrahim Martis Nurdeni, Nurdeni Nurdin Nurhati Gradeccha Advanie Pamungkas, Ilham Prasetya, Iwan Prasetyo, Nova Rahayu Permana Rain, Rinovian Rekyan Swasti Nariswari Restoeningroem Restoeningroem Retnaningsih, Endang Rina, Alfriealintina Rini Suryalies Fairini Rinovian Rais Rizki Riyanto Rosnawati Rosnawati Rukhoyah Rukhoyah Saleh, Sugiyanto Santi, Nur Sari, Raisa Rahmi Seprianus, Seprianus Septi Farah Nurrahmah Septia Eka Anggun Yusnia Sholahuddin Al Ayubi Simorangkir, Sahat T. Siregar, Dian Cris Natalia Siti Sundari Soeparlan Kasyadi Solikodin Djaelani Sri Mei Prihatin Sugiyanto Saleh Suhaeni, Fitri Sumardi Sumardi Sumaryati Sumaryati Sumaryati Tjitro Sumarto Suparman, Heru Supeno Supeno Supiyatna Supiyatna Supriatna, Erwin Suryatin, Suryatin Susi Susanti Suswidyantoro, Roni Syahid Syarif Hidayat Syifa Afidah Nurul Arifin Tamara Primadona Taufik Taufik Tri Anita Tuti, Tuti Virgana Virgiana Virgiana Wahyu Puji Lestari Wasahua, Olos Widodo Widodo Widodo Wikurnia Wikurnia Winda Sofidiniawati Wulansari, Lusiana Yanti, Nur Dwi Yorman Kasman Yos Uly Yulinda Siregar Zai, Meti Putriwati