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Panel Analysis of the Effect of Locally-Generated Revenue on Provincial Economic Growth

DOI : https://doi.org/10.36349/easmb.2020.v03i01.002
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The purpose of this study is to measure and analyze the effect of locally-generated revenue on the economic growth of 23 districts in Aceh Province, Indonesia over the period 2013-2017. Using the weighted fixed effect model (FEM) of panel regression, the study found that the locally generated revenue has a positive and significant effect on the economic growth of 23 districts in Aceh Province, Indonesia. Of the districts, 11 of them, their locally-generated revenues have a positive effect on the districts’ economic growth with the most significant increase was recorded in the North Aceh District and Banda Aceh City. In contrast, 12 districts’ locally-generated revenues have a negative effect on their economic growth with the lowest decline was recorded for the Sabang city. These findings suggest that to further improve economic growth; the local government should pay attention to further increase and manage efficiently their locally-generated revenues.

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Dr. Afroza Begum

Lecturer, Dept. of Pharmacology and Therapeutics, Shaheed Monsur Ali Medical College & Hospital, Uttara, Dhaka-1230, Bangladesh

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