ANALYSIS OF THE EFFECT OF SPECIAL ALLOCATION FUNDS (DAK) AND CAPITAL EXPENDITURE ON ECONOMIC GROWTH IN
Name : RAMADHAN
Student ID : 1409200010019
Academic Advisor :
1. Dr. T. Zulham, S.E, M.Si
2. Dr. Taufiq C. Dawood, S.E, M.Ec.Dev
The purpose of the study is to analyze the effect of special allocation funds and capital expenditure on economic growth in Aceh Province. The variables used are the special allocation funds and capital expenditure as explanatory variables and economic growth as the dependent variable during the period 2013 to 2016. The empirical model used is panel data analysis using Random Effect Model (REM) approach. The findings of this study reveal that two explanatory variables have a statistically significant effect on economic growth, but with different signs. The special allocation funds has a positive effect while the capital expenditure has a negative effect on economic growth. Based on these results, it is recommended that local governments need to increase regional financial independence, improve the quality of spending, and tighten its supervisory role on projects to ensure proper ulitisation of public funds.
Keywords : Economic Growth, Special Allocation Funds, Capital Expenditure, Random Effect Model