Government expenditure, economic growth and manpower absorption analysis of regencies and cities in South Sumatra, Indonesia

Eva Novaria, Taufiq Marwa, Didik Susetyo and Azwardi A.
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Eva Novaria: University of Sriwijaya
Taufiq Marwa: University of Sriwijaya
Didik Susetyo: University of Sriwijaya
Azwardi A.: University of Sriwijaya

Russian Journal of Agricultural and Socio-Economic Sciences, 2016, vol. 60, issue 12, 47-63

Abstract: The economic growth is necessary to increase prosperity and regional economic performance. For major component of economic growth on the demand side is the value of investment and government expenditure. Therefore, investment and government expenditure has a strategic role in improving the performance of regional economy. In line with that matter, this study was aimed to determine the relationship of government expenditure simultaneously with the economic performance of the regencies/cities in South Sumatra province. The data used is secondary data obtained from the Central Statistics Agency (BPS) of regencies/cities in the province of South Sumatra, Bank Indonesia, and the General Director of Fiscal Balance (DJPK) of Indonesia Republic. The analytical method used was multiple regression panel data using simultaneous equations. The results showed: government expenditure, investment and labor altogether significantly affects economic growth; the variables of economic growth, fiscal capacity, general allocation funds and the number of labor altogether affect government expenditure; and the variables of economic growth, government expenditure, wages and the number of investment altogether affect employment. This study has a limitation in a variety of variables that affect government expenditure, because it is for more research needs to re-inventory the variables that affect government expenditure, including variable Special Allocation Fund (DAK).

Keywords: GOVERNMENT EXPENDITURE; ECONOMIC GROWTH; LABOR ABSORPTION (search for similar items in EconPapers)
Date: 2016
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