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ABSTRACT This research is aimed to analyze the influence of government expenditure of the West Ja... more ABSTRACT
This research is aimed to analyze the influence of government expenditure of the West Java district/towns towards its RGDP and to analyze of multiplier effect government expenditure of West Java Province towards its RGDP. This research using the secondary time series data for the period 2006-2010 and cross section data of 26 districts/towns in West Java Province. Using the pool least square of fixed effect model (FEM), the research found that the indirect expenditure of district/town in West Java at the aggregate level has positive effect towards RGDP. However, dimensionally, the interest expenditure, grand expenditure, and social aids expenditure have no effect towards RGDP, subsidies expenditure, sharing fund expenditure, and financial aids expenditure have positive effect towards RGDP, while government personnel expenditure, and unpredicted expenditure have negative effect towards RGDP. Meanwhile, the direct expenditure of district/town in West Java at the aggregate level has positive effect towards RGDP on the 1 year time lag, however, dimensionally, the goods and services expenditure has positive effects towards RGDP without time lag, and the capital expenditure has positive effects towards RGDP on the 2 years time lag. The last result in this research found that the local government expenditure of West Java has high multiplier effect towards RGDP.
Based on the result found in this research, some suggestions are presented as follows. (1) The local government district/town of West Java Province should be able to re-arrange the composition of budget allocation for more appropriate. (2) The local government of the district/town of West Java Province should be able to increase the capital expenditure budget, and establish the infrastructure development project which has shorter payback period in order to encourage the growht of private investments in supporting and accelerating the development of regional economy. (3) To maintain and increase the multiplier effect government expenditure of the West Java Province, the government should allocate more the budget for some expenditure that have high multiplier effect.

Keywords: Government Expenditure, PDRB, multiplier effect

This research is aimed to analyze the influence of government expenditure of the West Java distri... more This research is aimed to analyze the influence of government expenditure of the West Java district/towns towards its RGDP and to analyze of multiplier effect government expenditure of West Java Province towards its RGDP. This research using the secondary time series data for the period 2006-2010 and cross section data of 26 districts/towns in West Java Province. Using the pool least square of fixed effect model (FEM), the research found that the indirect expenditure of district/town in West Java at the aggregate level has positive effect towards RGDP. However, dimensionally, the interest expenditure, grand expenditure, and social aids expenditure have no effect towards RGDP, subsidies expenditure, sharing fund expenditure, and financial aids expenditure have positive effect towards RGDP, while government personnel expenditure, and unpredicted expenditure have negative effect towards RGDP. Meanwhile, the direct expenditure of district/town in West Java at the aggregate level has positive effect towards RGDP on the 1 year time lag, however, dimensionally, the goods and services expenditure has positive effects towards RGDP without time lag, and the capital expenditure has positive effects towards RGDP on the 2 years time lag. The last result in this research found that the local government expenditure of West Java has high multiplier effect towards RGDP.

Keywords: Government Expenditure, PDRB, multiplier effect