The Effect of Regional Wealth, Regional Dependence Level, and Regional Financial Independence on Fiscal Performance

Abstract

Purpose: This study aims to determine the effect of regional wealth, the level of regional dependence, and regional financial independence on fiscal performance partially and simultaneously. Methods: This research uses a quantitative approach with multiple linear regression analysis through Eviews version 9 software, focusing on the Bekasi City Government from 2010 to 2020. The sample was determined using a purposive sampling technique, resulting in 11 data from the Local Government Financial Report (LKPD). Hypothesis testing was carried out using the t-test and f-test methods. Findings: The research shows that regional wealth has no significant effect on fiscal performance. In contrast, the level of dependence and regional financial independence have a positive and considerable influence. Simultaneously, these three factors also impact fiscal performance. Practical Implications: This study recommends that local governments manage financial dependency and independence. A focus on financial independence can generate more stable revenues and reduce dependence on central funds. Prioritizing local economic development strategies for fiscal sustainability and improved public services in the future is important.