ANALISIS PENGARUH PERTUMBUHAN PAD, PDRB, DAN BELANJA MODAL TERHADAP FISCAL STRESS PADA KABUPATEN DAN KOTA DI PROVINSI JAWA TENGAH

The purposes of this research are (1) to analyse and re-examine the influences of growth of Local Revenues (PAD), growth of Regional Gross Domestic Product (PDRB), and growth of Capital Expenditures to Fiscal Stress in Municipalities and Regencies in Central Java Province during a period of 2009 – 2013. (2) to analyse the influence of time variant to the Fiscal Stress in the observed period. This study attempts to improve Iskandar Muda’s study (2012) by replacing its Fiscal Stress variable measure with the one of the Fiscal Stress measures introduced by Arnett’s study (2011). This present study employs panel data of Central Java consisting of 35 municipalities and regencies observed from 2009 till 2013. Fixed Effects Model (FEM) with Least Square Dummy Variable (LSDV) method is utilised to achieve the purposes. Results of the study suggest that the growth of PAD, growth of PDRB, and the the growth of Capital Expenditures have simultaneously significant influences to the Fiscal Stress. Individually, only Capital Expenditure Growth has significantly negative impact on the Fiscal Stress, whereas the growth of PAD and the PDRB growth have no significant impacts on the Fiscal Stress. The significant finding indicates that the higher the growth of Capital Spending, the lesser the Fiscal Stress is. Interestingly, this study results in a different ouput from the previous study of Iskandar Muda (2012) which suggested that there was no significant impact of the Capital Spending growth on the Fiscal Stress. This study’s significant finding may imply that the growth of Capital Spendings will create potential or expected revenues in the future. Consequently, it may lead to lessening in the Fiscal Stress. With year of 2012 as a benchmark, the study’s findings also suggess that the Fiscal Stress in the periods of 2009 - 2013 were significantly different from the 2012 Fiscal Stress benchmark