An Empirical Analysis of Capital Expenditure, Government Size and Legislative Size on Local Government Financial Performance: Evidence from Indonesian Provinces
DOI:
https://doi.org/10.35334/cdpysm12Keywords:
government size, legislative size, Local Financial Performance, Capital ExpenditureAbstract
This research investigates the influence of capital expenditure, government size, and legislative size on the financial performance of Indonesian provincial governments from 2022 to 2024. Using a purposive sampling method, the study analyzed 34 provinces, (the four New Autonomous Regions formed as a result of the division of the Papua region namely South Papua, Central Papua, Highland Papua, and Southwest Papua are excluded from the research sample). intentionally excluding four newly formed autonomous regions to maintain data consistency. The empirical analysis was conducted via panel data regression using EViews. The results reveal that heightened capital expenditure has yet to be balanced by effective management, while asset size and legislative capacity do not serve as primary determinants of financial performance. To address the limitations of relying solely on secondary data, future studies should use the internal control system as a moderating variable and extend the longitudinal scope to capture long-term financial trends and qualitative dimensions such as integrity
Downloads
References
Andhini, S., Gunawan, J., Chen, H. Y. (2023). Influence of General Allocated Fund, Special Allocation Fund, And Capital Expenditure on Financial Performance of Local Government. International Journal of Contemporary Accounting, 5(2), 125–140.
Antika, Nurhayati, N., Teguh, I., Nurahmadani, L. S. (2026). Financial and non-financial determinants of local government financial performance : evidence from West Java , Indonesia. 4, 226–239.
Anynda, N.S. & Hermanto, S. B. (2020). Pengaruh rasio kemandirian daerah, efektifitas pendapatan asli daerah, dan pengelolaan belanja daerah terhadap kinerja keuangan daerah. Jurnal Ilmu Dan Riset Akuntansi, 9, 1–20.
Aswar, K. (2019). Financial Performance of Local Governments in Indonesia. European Journal of Business and Management Research, 4(6), 1–6.
Bai, J., & Liao, Y. (2017). Inferences in panel data with interactive effects using large covariance matrices. Journal of Econometrics, 200(1), 59–78. https://doi.org/10.1016/j.jeconom.2017.05.014
Fauzi, H. H., & Widarjo, W. (2021). Financial Performance and Human Development with Control of Regional Characteristics. 32. https://doi.org/10.32996/jefas
Handayani, N & Dwigantara, M. . (2020). Pengaruh Belanja Modal Terhadap Kinerja Keuangan Dengan Pendapatan Asli Daerah Sebagai Intervening. Jurnal Ilmu Dan Riset Akuntansi, Volume 9(e-ISSN: 2460-0585).
Harry, M., Zein, M., Muhtarom, M., Mulyadi, M., & Septiani, S. (2024). Examining the Role of Local Government ’ s Financial Performance and Capital Expenditure in Increasing Economic Growth in Banten Province , Indonesia ( 2018 – 2022 ). Journal of Risk and Financial Management, 17(10), 1-14 https://doi.org/10.3390/jrfm17100456.
Hendaris, R. B., & Sastradipraja, U. (2024). Analysis of Factors Affecting Local Government Financial Performance. Dinasti International Journal of Economics, Finance & Accounting, 5(5), 5399–5410.
Ishak, J. F., Mai, M. U., Akuntansi, J., & Bandung, P. N. (2021). The Financial Performance Of Regional Government. 5(1), 11–17.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agencycosts and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Mubarok, M. H., Nasution, A. A., & Kesuma, S. A. (2022). Local government financial performance : the effects of capital expenditure and intergovernmental revenue ( The case of South Sumatra Province , Indonesia ). Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 9(6), 503–512. https://doi.org/10.22437/ppd.v9i6.11364
Novita, R., Arza, F. I. (2024). Pengaruh Pendapatan Asli Daerah, Dana Perimbangan dan Belanja Modal terhadap Kinerja Keuangan Pemerintah Kabupaten/Kota di Pulau Sumatera Tahun 2021. Jurnal Eksplorasi Akuntansi (JEA), 6(1), 430–443.
Oktaviani, R., Wijaya, S.Y., E. (2020). Factors Affecting The Local Governments Financial Performance. Journal of Economics and Behavioural Studies, 12(4), 84–89.
Periansya, Dewata, E., Sari, Y., N. F. (2021). The Effect of Locally Generated Revenue as an Intervening Variable on the Financial Performance of the Regional Government of South Sumatra Province Keywords Balancing Fund , Capital Expenditure , Locally Generated Revenue , Government Financial Performan. Journal of Accounting, Finance and Auditing Studies, 7/4, 80–99. https://doi.org/10.32602/jafas.2021.034
Perlman, B. J. (2020). Agency vs . Stewardship Theory in Local Government Contracted Mobile Apps : Analysis of Survey Data on User Satisfaction in China. 7(4). https://doi.org/10.4018/IJPADA.20201001.oa2
Putri, R. D., Hendaris, R. B., Jenderal, U., & Yani, A. (2025). The Influence of Local Government Size, Legislative Size, and BPK Audit Opinion on Local Government Financial Performance. E-Jurnal Akuntansi, 35(6), 1752–1771. https://doi.org/10.24843/EJA.2025.v35.i06.p17.
Republik Indonesia. Undang-undang Nomor 23 Tahun 2014 Tentang Pemerintahan Daerah.
Republik Indonesia. Peraturan Pemerintah Nomor 12 Tahun 2019 Tentang Pengelolaan Keuangan Daerah.
Republik Indonesia. Peraturan Menteri Dalam Negeri Nomor 19 Tahun 2016 Tentang Pedoman Pengelolaan Barang Milik Daerah.
Rusmita, S. (2020). Effect of Regional Government Characteristics of Financial Performance. International Research in Economics and Finance, 3(2). https://doi.org/10.20849/iref.v3i2.703
Sari, N.M.D.P & Mustanda, I. K. (2019). Pengaruh Ukuran Pemerintah Daerah, Pendapatan Asli Daerah dan Belanja Modal Terhadap Kinerja Keuangan Pemerintah Daerah. E-Jurnal Manajemen, 8(8), 4759–4787.
Sartika, N. (2019). Analisis Rasio Keuangan Daerah untuk Menilai Keuangan Pemerintah Daerah Kepulauan Meranti. Inovbis: Jurnal Inovasi Bisnis, 7, 147–153.
Silitonga, N., Manurung, A.H., Mayangsari, S., Sormin, P. (2021). The Moderating Effect Of Regional Indpendence On The Effect Of Financing Policies , Capital Expenditure And Transfer Fund Towards The Performance Of Local Governments. Turkish Journal of Computer and Mathematics Education, 12(3), 5239–5251.
Sudarsana, H. S., & Rahardjo, S. N. (2013). Pengaruh Karakteristik Pemerintah Daerah dan Temuan Audit BPK Terhadap Kinerja Pemerintah Daerah (Studi pada Pemerintah Kabupaten/Kota di Indonesia). 2(6), 1–13.
Yerriandha, Y., Gmayuni, R.R., Suhendro, S. (2026). Analysis of Factors Affecting Financial Performance in Local Governments with Community Participation as a Moderating Variable. International Journal of Education, Social Studies, And Management (IJESSM), 6(1), 153–165.
Yerriandha, Y. (2025). A literature Review: Determinants of Financial Performance in Local Governments. 5(3), 1728–1736.
Zamzami, F. & Rahman, F. (2023). Determinants of Local Government Financial Performance in Indonesia. Academic Journal of Interdisciplinary Studies, 12(25), 332–347.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Handani Maheresmi, Siti Rokhimah (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
