The Relationship Between the Regional Financial Independence Ratio and Regional Economic Growth in Regencies/Cities of Jambi Province (2019–2024)

Ratna Eka Savira; Reka Maiyarni; Widya Sari Wendry

doi:10.63922/ijebir.v5i05.6014

Ratna Eka Savira Student, Faculty of Economics and Business, University of Jambi, Jambi, Indonesia
Reka Maiyarni Lecturer, Faculty of Economics and Business, University of Jambi, Jambi, Indonesia
Widya Sari Wendry Lecturer, Faculty of Economics and Business, University of Jambi, Jambi, Indonesia

DOI: https://doi.org/10.63922/ijebir.v5i05.6014

Keywords: Communication, conflict management, goal setting, clear vision.

Abstract

This study aims to analyze the relationship between the independence ratio and the economic growth of districts/cities in Jambi Province in 2019–2024. This study uses a quantitative approach by utilizing secondary data obtained from 66 samples in 11 districts/cities in Jambi Province. Data analysis was conducted using panel data regression techniques with the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). The selection of the best model was carried out through the Chow test, the Hausman test, and the Lagrange Multiplier test, while data testing included classical assumption tests and hypothesis tests processed using EViews 13 software. The results of the study indicate that the independence ratio is partially positively and significantly related to the economic growth of districts/cities in Jambi Province. This finding indicates that the higher the level of regional financial independence reflected in the ability of local governments to finance government administration through Regional Original Revenue (PAD), the better the regional economic growth. The results of this study are expected to be a consideration for local governments in increasing financial independence through optimizing Regional Original Revenue so as to encourage sustainable economic growth. Further research is recommended to add other variables suspected of being related to regional economic growth and to employ different research approaches to obtain more comprehensive results.

Keywords:Communication, conflict management, goal setting, clear vision.

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