The Influence of Regional Original Revenue, General Allocation Funds, and Regional Expenditure on the Level of Regional Financial Independence (Case Study of Districts and Cities in Banten Province 2019-2023)

This study aims to analyze the influence of Regional Original Revenue (PAD), General Allocation Fund (DAU), and Regional Expenditure on the level of regional financial independence in regencies and cities in Banten Province in 2019–2023. The study is based on the theory of fiscal decentralization and agency theory that explains the relationship between the central government and regional governments in public financial management. The research method used is a quantitative method with a descriptive approach. The data used are secondary data obtained from the Budget Realization Report (LRA) from the Directorate General of Fiscal Balance (DJPK) website. The research sample consisted of 8 regencies/cities over five years of observation, resulting in 40 populations and 120 valid data. The data analysis technique used was panel data regression with the help of e-views 12 software. The results of the study indicate that Regional Original Revenue has a significant positive effect on the level of regional financial independence, General Allocation Fund has a significant negative effect, and Regional Expenditure has a significant negative effect. Simultaneously, Regional Original Revenue, General Allocation Fund, and Regional Expenditure have a significant negative effect on the level of regional financial independence. This study concludes that increasing Regional Original Income and productive spending management are important factors in increasing regional financial independence.

Regional Original Income, General Allocation Fund

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