Financial performance in Central Java Provinces: the role of regional income and allocation funds during 2016-2020

Nurizzati Nurizzati; Sharifudin Sharifudin

doi:10.36407/jpafm.v4i2.1632

Nurizzati Nurizzati Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta, Jakarta, Indonesia
Sharifudin Sharifudin Sekolah Tinggi Ilmu Ekonomi Indonesia Jakarta, Jakarta, Indonesia

DOI: https://doi.org/10.36407/jpafm.v4i2.1632

Keywords: General Allocation Fund, Special Allocation Fund, Local Revenue, Financial Performance.

Abstract

Purpose: This study aims to test and obtain empirical evidence of the influence of local revenues, special allocation funds, and general allocation funds on financial performance in the Central Java region during the 2016-2020 period.

Methods: This study employed a purposive sampling method with a population consisting of 35 regencies/cities in Central Java for the period 2016-2020. Data analysis was conducted using multiple linear regression analysis with the assistance of SPSS version 23.

Findings: The results indicated that Regional Original Income and special allocation funds significantly affect regional financial performance, while the general allocation fund does not considerably influence economic performance.

Practical Implications: This study provides insights for local governments to focus on enhancing local revenue and effectively utilizing special allocation funds to improve financial performance. Governments should manage general allocation funds wisely to reduce dependence on these funds.