THE EFFECT OF SPECIAL AUTONOMY FUNDS, REGIONAL ORIGINAL REVENUE, AND CAPITAL EXPENDITURE ON ECONOMIC GROWTH

Abstrak

  Abstract: This study aims to analyze the effect of Special Autonomy Funds, Locally Generated Revenue (PAD), and Capital Expenditure on economic growth in Aceh Province. Economic growth is measured using Gross Regional Domestic Product (GRDP). The data used consists of panel data from 23 districts/cities in Aceh Province during the period 2014–2023. The analysis method used is panel data regression using three model approaches: Common Effect, Fixed Effect, and Random Effect. The best model is selected through the Chow Test, Hausman Test, and Lagrange Multiplier (LM) Test. Based on the test results, the Random Effect Model (REM) is selected as the most appropriate. The estimation results show that Special Autonomy Funds and Locally Generated Revenue have a positive and significant effect on economic growth in Aceh Province, while Capital Expenditure has no significant effect on economic growth. This finding suggests that strengthening Special Autonomy Funds and Locally Generated Revenue can be a key strategy in driving economic growth in Aceh. Meanwhile, the insignificant results of the Capital Expenditure variable indicate that government spending on physical investment has not optimally driven economic growth. Keywords: Special Autonomy Fund, Regional Original Income, Capital Expenditure, Economic Growth, Panel Data, Random Effects