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Impact of Capital Expenditure and Public Utility Customers to Economic Development of District-City in Sumatra-Indonesia

Author

Listed:
  • Didik Susetyo

    (Faculty of Economics, University of Sriwijaya, Indonesia,)

  • Zunaidah Zunaidah

    (Faculty of Economics, University of Sriwijaya, Indonesia,)

  • Siti Rohima

    (Faculty of Economics, University of Sriwijaya, Indonesia,)

  • Devi Valeriani

    (Faculty of Economics, University of Bangka Belitung, Indonesia,)

  • Abdul Bashir

    (Faculty of Economics, University of Sriwijaya, Indonesia.)

Abstract

The research problem is how to influence local public utility capital expenditures, the amount of household electric customers, the number of clean water customers, the number of telephone customers on the economic development of the district-city in Sumatra, Indonesia. The theory of regional economic growth used Keynesian models and Concept Capital expenditure for the Public Utility Law according to Wagner. Previous empirical research, among others: (a) Susetyo et al. (2017), (b) Prasetyo (2013), (c) Yanizar (2012). Research methods include (a) the scope of public utilities is capital expenditure, the number of customers of electricity, water, telephone and the gross regional domestic product (GRDP). The unit of analysis is the district-city as much as 155 in Sumatra-Indonesia; (b) the data used is secondary data and source of data from the official publication; (c) the method is quantitative analysis and estimation method is multiple ordinary least square method of panel data. The result is simultaneously (F-test) showed that the results obtained are four variables observed were regional public utility capital expenditures, the number of electricity customers, the number of water customers, the number of telephone subscriber positive effect on the GRDP regencies-cities significantly. Partially (t-test), indicating that capital expenditure has positive influence local public utilities to GRDP regencies and cities significantly. The local public utility capital expenditures are a positive and significant influenced. Likewise, shows that the effect of the number of customer electricity, clean water, the phone toward the regional gross domestic product is positive and significant. Analyzing coefficient of determination (R2) is 62.02% means the results of the model estimates the variation can be explained by four variables and significantly.

Suggested Citation

  • Didik Susetyo & Zunaidah Zunaidah & Siti Rohima & Devi Valeriani & Abdul Bashir, 2018. "Impact of Capital Expenditure and Public Utility Customers to Economic Development of District-City in Sumatra-Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 126-135.
    • Handle: RePEc:eco:journ1:2018-01-17
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    References listed on IDEAS

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    2. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    3. Michael Storper, 2011. "Why do regions develop and change? The challenge for geography and economics," Journal of Economic Geography, Oxford University Press, vol. 11(2), pages 333-346, March.
    4. Valerie A. Ramey, 2011. "Identifying Government Spending Shocks: It's all in the Timing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 1-50.
    5. Henrekson, Magnus, 1993. "Wagner's Law--A Spurious Relationship?," Public Finance = Finances publiques, , vol. 48(3), pages 406-415.
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    Cited by:

    1. Mega Riandini Arsallya & Azwardi Azward & Yusnaini Yusnaini, 2021. "Analysis of factors affecting capital expenditures and their implications on government financial performance provinces in Indonesia 2011-2019," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(5), pages 95-106, July.

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    More about this item

    Keywords

    Regional Economy; Capital Spending Public Utilities; Customers of Electricity; Clean Water and Telephone;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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