The Effect Of Pad, Transfer Funds And Poverty Level On Regional Expenditure In Regency/City Of Kalimantan Island
Keywords:
PAD, Transfer Funds, Poverty Rate, Regional Expenditure, Flypaper Effect
Abstract
This study aims to examine the influence of Locally Generated Revenue (PAD), Transfer Funds, and Poverty Levels on Regional Expenditures in regencies/cities on Kalimantan Island during the 2022–2024 period. The study used a quantitative approach with panel data regression analysis on 56 regencies/cities, resulting in 168 observational data. The research data were sourced from the Directorate General of Fiscal Balance (DJPK) and the Central Statistics Agency (BPS). Based on the model testing results, the Random Effect Model (REM) was selected as the best estimation model. The results showed that PAD and Transfer Funds had a positive and significant effect on Regional Expenditures, while the Poverty Level did not show a significant effect. Transfer Funds were the variable with the most dominant influence on Regional Expenditures, reflecting the still high regional fiscal dependence on the central government and indications of a flypaper effect. Collectively, all independent variables had a significant effect on Regional Expenditures
References
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Anjelika, R., et al. (2026). Fiscal Decentralization and Regional Financial Independence in Indonesia. Journal of Economics and Public Policy, 12(1), 45–58.
Armawaddin, M., Rumbia, WA, & Afiat, MN (2017). Analysis of the Flypaper Effect of Regional Spending in Districts/Cities in Sulawesi. Indonesian Journal of Economics and Development, 18(1), 5.
Azis, MI, Padliansyah, R., Gulabdin, SB, Phin, NY, & Fook, LM (2026). The Influence of Regional Income and Revenue Sharing Funds on Regional Expenditures. Journal of Business Management, 13 (1), 370-384.
Central Statistics Agency (BPS). (2022). Poverty data for districts/cities in Kalimantan. BPS.
Central Statistics Agency (BPS). (2023). Gross Regional Domestic Product of East Kalimantan. BPS.
Bahl, R., & Bird, R. (2018). Fiscal Decentralization and Local Finance in Developing Countries. Edward Elgar Publishing.
Baltagi, B. H. (2005). Econometric Analysis of Panel Data (3rd ed.). England: John Wiley & Sons.
Baltagi, B. H. (2021). Econometric Analysis of Panel Data (6th ed.). Springer.
Central Kalimantan Statistics Agency (BPS). (2024). Central Kalimantan poverty data 2024. Central Kalimantan Statistics Agency (BPS).
Dahliah. (2022). Regional Original Income and Its Influence on Regional Expenditure. Journal of Regional Finance, 7(1), 55–67.
Fernandes, R., & Fauzia, I. (2022). The Influence of PAD on Regional Expenditure in Regency/City Governments in Indonesia. Journal of Public Accounting, 10(3), 88–99.
Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th ed.). New York: McGraw-Hill.
Gujarati, DN, & Porter, DC (2012). Fundamentals of Econometrics (5th ed.). Jakarta: Salemba Empat.
Halim, A. (2016). Regional Financial Management (4th Edition). UPP STIM YKPN.
Haq, AI, Masdar, R., Ikbal, M., & Betty. (2025). The Effect of Locally-Generated Revenue, General Allocation Fund, Special Allocation Fund, and Revenue Sharing Fund on Capital Expenditure of Regencies and Municipalities in Indonesia. Journal of Accounting and Regional Finance, 8(2), 210–225.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305–360.
Kurniadi, A. (2023). Analysis of the Influence of Government Expenditure on Regional Spending in Indonesia. Journal of Economics and Development, 14(2), 77–90.
Malau, R., et al. (2023). Analysis of Peacock-Wiseman Theory in Local Government Expenditure. Journal of Fiscal Policy, 11(1), 50–63.
Musgrave, R. A. (1959). The Theory of Public Finance: A Study in Public Economy. New York: McGraw-Hill.
Nany, M., Pratama, DB, Prasetyaningrum, M., & Kusumaningsih, AU (2022). The Effect of Pad, Dbh, Dau, Dak and Regional Spending on Poverty in Central Java. Journal of Economics and Entrepreneurship, 22(03).
Oates, W.E. (1972). Fiscal Federalism. New York: Harcourt Brace Jovanovich.
Paraswati, N., et al. (2024). The Effect of Transfer Funds on Regional Spending in Indonesia. Journal of Accounting and Public Finance, 13(1), 65–79.
Pasa, A., et al. (2023). Poverty Levels and Regional Expenditure Policies in Indonesia. Journal of Regional Economics, 6(2), 101–115.
Prasetyo, PE (2020). The Role of Public Expenditure on Poverty Alleviation. International Journal of Scientific & Technological Research, 9(3), 3422–3428.
Pratama, AY, & Setiawan, H. (2023). Analysis of the Impact of Regional Original Revenue and General Allocation Funds on Regional Government Capital Expenditure Allocation in Indonesia. Journal of Economics and Public Finance, 10(1), 45–62.
Republic of Indonesia. (2014) Law Number 23 of 2014 concerning Regional Government. State Secretariat.
Republic of Indonesia. (2022) Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments. State Secretariat.
Roskaputri, F., et al. (2024). The Influence of Regional Original Income and Transfer Funds on Regional Expenditure in West Kalimantan. Journal of Accounting and Regional Government, 9(1), 15–28.
Rusmita, S. (2016). The Influence of Regional Original Income, General Allocation Fund, and Special Allocation Fund on Regional Expenditure of Districts/Cities in West Kalimantan. Journal of Regional Economics, 5(2), 44–56.
Sembiring, R., et al. (2025). Agency Theory in Regional Government Financial Management. Journal of Public Administration, 10(1), 91–105.
Sugiyono. (2022). Quantitative Research Methods. Bandung: Alfabeta.
Tifanny, L. (2025). Analysis of the Flypaper Effect on Regional Expenditure in Districts/Cities in West Kalimantan. Journal of Accounting and Regional Finance, 11(1), 70–84.
Wandira, R., & Siregar, H. (2022). Local Government Expenditure, Economic Growth, and Its Implications for Poverty Levels. Journal of Development Economics, 23(1), 89–104.
Wooldridge, J. M. (2020). Introductory Econometrics: A Modern Approach (7th ed.). Cengage Learning.
Published
2026-07-23
How to Cite
Retno Wahyuni, Ariefanda Iqbal Perdhana, & Juanda Astarani. (2026). The Effect Of Pad, Transfer Funds And Poverty Level On Regional Expenditure In Regency/City Of Kalimantan Island. International Journal of Economics, Business and Innovation Research, 5(04), 5071-5090. https://doi.org/10.63922/ijebir.v5i04.4611
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