Assessing the Financial Performance of Regional Governments: A Study of Macroeconomic Drivers in Southeast Asia

Jufri Nur (), Hamrullah Hamrullah and Andi Ratna Sari Dewi
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Jufri Nur: Hasanuddin University
Hamrullah Hamrullah: Hasanuddin University
Andi Ratna Sari Dewi: Hasanuddin University

A chapter in Proceedings of the 9th International Conference on Accounting, Management, and Economics 2024 (ICAME 2024), 2025, pp 2849-2859 from Springer

Abstract: Abstract This study examines the macroeconomic factors influencing the financial performance of regional governments in Southeast Asia during the period 2018–2021. Using gross savings as a proxy for financial performance, the analysis focuses on the impacts of GDP growth, foreign direct investment (FDI), unemployment rates, and government expenditure growth across four countries: Indonesia, Malaysia, Thailand, and the Philippines. Employing panel data regression, the results highlight GDP growth as a significant driver of fiscal performance, with higher growth rates leading to improved financial stability. However, the effects of FDI inflows, unemployment rates, and government expenditure were found to be statistically insignificant, suggesting that their influence on regional financial outcomes is more complex and may be moderated by external shocks, such as the COVID-19 pandemic. The findings underscore the importance of fostering sustained economic growth to enhance fiscal sustainability, while also highlighting the need for further research into the roles of investment, employment, and public spending efficiency in shaping regional financial outcomes. The study provides valuable insights for policymakers aiming to strengthen regional fiscal resilience in emerging Southeast Asian economies.

Keywords: Regional financial performance; GDP growth; foreign direct investment; unemployment; government expenditure (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-758-8_231

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DOI: 10.2991/978-94-6463-758-8_231

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