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BUSINESS,

Promoting',. Accounting,

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UM Purwokerto Press

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I ,rr,, : 978-602-6697-30-1

PROCEEDINGlnternational Conference of Business, Accounting and fcontmy Promoting Research

and Developmental Activities in Business, Accounting, and'Eponomics Through Social

Science ln novations.Friday and Saturday, 3-4 August 2018 M/27-22 Dzulqo'dah 1439 H. Aula AK. Anshori,Universitas Muhammadiyah Purwokerto

First print: February 2019xi+271page ,20,5 cm x 29,5 cm

ISBN : 978-602-6697-30-1

Advisor

Organizing Committee

Reviwers

Akhmad Darmawan, S.E., M.Si(Dekan FEB Universitas Muhammadiyah Purwokerto)Bima Cinintya Pratama, S.E., M.Sc.Ak, CA

Dr. Elvia R. shauki (Uilivdrsity of South Australia)Prof. Keisuke Nagase (Kanazawa University)Assoc. Prof; Dr. Pensri l€roenwanit (Khon Kaan University)Prof. Dr. Syed lsmail Syed Mohamad (Universiti Pendidikan Sultan ldris)

Dr. Nurul Fadly Habidin (Universiti Pendidikan Sultan ldris)Prof. Dr. Khalil Md:Nor.{Universiti Teknologi Malaysia)Dr. Noriza Mohd Jamal (Universiti ieknologi Malaysia)

Dr. Siti Rahmah Awang (Universiti Teknologi Malaysia)

Eddy Junarsin, S.E., M.BrA., Ph.D., C.F.P. (Universitas Gadjah Mada)

Doddy Setiawan, S.E., M.Si., llvlRl, Ph.D, Ak. (Universitas Sebelas Maret)Dr. Eko Suyono (Universitas Jenderal Soedirman)Dr. Naelati Tubastuvi (Universitas Muhammadiyah Purwokerto)Dr. Sri Wahyuni, M.Si. (Universitas Muhammadiyah Purwokerto)Herni Justiana A, Ph.D. (Universitas Muhammadiyah Purwokerto)Dr. Azmi Fitriati, S.E., M.Si. (Universitas Muhammadiyah Purwokerto)Dr. Eko Hariyanto, S.E., M.Si., Ak., CA. (UMPurwokerto)

Suryo Budi S., Ph.D. (Universitas Muhammadiyah Purwokerto)

Editors lka Yustina Rahmawati, S:E., M.Sc.

Siti N urazizah, S.E., M.Si

Fatma Bagis, S.E., M.Si

Mastur Mujib l, S.E., M.Si

Putri Dwi Cahyani,5.E., M.E.l

Secretariat : Tiara Pandansari, S.E., M.Si, Ak. CA

Publishe r

UM Purwokerto Press (Anggota APPTI)

Jalan Raya Dukuh Waluh, PO.BOX 202, Purwokerto 53182, Telp (0281) 636751ext:474

Email: ump.oress@gmail.comWebsite: www.lpip.ump.ac.id

.l5BNr'978-602-6697-30-1,i:rj: I :ii ii, i;; -i

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Steering Committee

COMMITTEE

1.)3.4.5.6.

Akhmad Darmawan, S.8., M.Si.Wida Purwidianti, S.E., M.Sc.Dra. Tri Septin Muji Rahayu, M.Si.Hadi Pramono, S.E., M,Si, Ak., CA.Iwan Fakhruddin, S.E., M.Si., Ak., CA.Hermin Endratno, S.E., M.Si.

Organizing Committee ,. "t, .,,-

1. Bima Clnlntya Pratama, S.8., M.Sc., Ak., CA. (Chairman)2. Tiara Pandansari, S.E., M,Si., Ak., CA. (Chief Secretary)3. Nur Isna Inayati, S.S.T., M.Si. (Sscretary)4. Annisa trma Hartikasari, S.E., M.Sc., Ak. (Secretnry)5. Ira Hapsari, S,E., M.Si., Ak, (Chief Treasurer)6, Maharrni Retnaningrum, S.8,, M.M. (freasurer)7. Ika Yustina Rahmawati, S.E., M.Sc. (Chief Scientific Division)8, Rina Mudjiyanti, S.E., M.Si. (Scientilic Dirision Staff)9. Putri Dwi Cahyani, S.E., M.E.I. (Scientilic Division Staff)10. Restu Frida Utami, S.E., M.Si. (Scientific Division Staff)11. Siti Nur Azizah, S.E., M.Si. (Scientific Division Staff)12. Fatmah Bagis, S.8., M.Si. (Scientilic Division Staff)13. Mastur Mujib Ikhsani, S.8., M.Si. (Scientific Division Staff)14, Yudhistira Pradipta, S,E,, M.M. (Scientific Ilivision Staff)15. Purnadi, S,E,, M.Si, (Chi€f General Division)16. Alfato Yusnar, S.8,, M,Si, (General Division)

..]

1, l:

ISBN : 978-602-6697-30-L

Preface ICBAE 20I8The 1't ICBAE International Conference on Business, Accounting, and

Economics 2018(rcBAE 2018)

August,3-4th2018Universitas Muhammadiyah Purwokerto, Indonesia

Dear Presenters and Delegates,Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto organized an

Intemational Conference on Business, Accounting, and Economics (ICBAE). Oru theme is "PromotingResearch and Developmental Activities in Business, Accounting, and Economics Through SocialScience Innovations"We are proud to know that there is a thick manuscript submissions came to our table for this conference.Opportunities that could be obtained by attending The 1* 1CBAE are achieve improvemeflt ideas,connect with like-minded colleagues, and generate momentum for change in your organization. lndetail, there are international academic manuscripts has been accepted

The aim objective of ICBAE is to present the latest research and results of scientists related toBusiness, Accounting, and Economics. This conference have purpose to bring together researchers andpractitioners whose work promotes the well-being professors and practitioners through mindfulless.The latest research findings and their applications will be presented, with rich oppofiunities fordiscussion and networking. ICBAI, provide an invaluable opportunity to leam the latest practices foreffectively adclressing challenges facing the field of research. Leam directly fiom experiencedcompliance both formal presentations and informal networking events. We hope that the conferenceresults constituted significant contribution to the knowledge in these up to date scientific field.

We are very confident that our presenters and delegates will get a lot of ideas together and

experience of this conference. In addition, our participants will enjoy additional insight liom ourplenary session key:ote speakers, namely Dr. Elvia R. Shauki from University ofSouth Australia, ProfKeisuke Nagase from Kanazawa University Japan, Assoc. Prol Dr. Pensri Jaroenwanit Khon Kaen

University Thailand, Dr. Nurul Fadly Habidin from University Pendidikan Sultan Idris Malaysia andDr. Naelati Tubastuvi liom Universitas Muharnmadiyah Purwokerto.

Through this conference, we are committed to promote and improve our mission andacademic culture synthesize global progress with local knowledge. Therefore, it is my great honou towelcome you to ICBAE in great cultural city of Purwokerto, Indonesia. Welcome to ICBAE 2018,

Universitas Muhammadiyah Purwokerto.

Best wishes,

Akhmad Darmawan, S.E, M.SiHead of The Departnent

http://icbae.ump.ac.id.

ISBN : 978-502-6597-30-1

TABLE OF CONTENTS

EXECUTTVECOMM|TTEE.................. .............4

Preface 1CBAE 2018 ............................ . . . . . . . . . . . . ,

. . . . , . ,

. . , . , . . , . . . . . . . . . ........... .............. 5

TABLE OF CONTENTS ................................................. .............5

ANALYSIS OF DETERMINANT FACTORS OF BRAND EQUITY TO THE BUYING DECISIONOF

PREPATD GSM CARD.................. ................... 9

STRATEGY OF STRENGTHENING PUBLIC PURCHASING POWER IN PEMALANG DISTRICT............... 18

FACTORS AFFECTING DECISION OF RE-PURCHASE IN BANYUMAS TRADITIONAL MARK EIi..........27

EMPLOYEE RESPONSE AGAINST MOTIVATION :PROVISION TO EMPLOYMENT AGENCY

EDUCATION AND TRAINING OF NORTH,TORAJA pISTRICT ................................ 39

FACTORS AFFECTING THE DISTRIBUTION OF CREDii..AND WITHDRAWAL OF THIRD PARTY /LOAN TO DEPOSIT RATIO AT BPR WORKINC AhEA IN OFFICES OF BANK INDONESIA

SEMARANG ........ ............. 47.

FRAUD GAP IN E-AUCTION (QUALITATIVE METHOD WITH CASE STUDY, IN KPKNL JAKARTA

..................... 53

FORESIGHT ACTIVITY lN MANAGEMENT ACCOUNTING AND CONTROL : A CONTINGENCY

APPROACH......... .............59

STUDENT ENTREPRENEURAL PROGRAM QUALITY ENHANCEMENT STRATEGY AT JENDERAL

SOEDIRMAN UNIVERSITY..,...... 63

VALUE CHAIN ANALYSIS OF BAMBOo CRAFT INDUSTRY: STUDY ON ..................... .......................70

STRENGTHENING CREATIVE INDUSTRIES IN BANYUMAS DISTRICT, INDONESIA.............,..............70

IMPACT OF TRAINING ON SERVICE QUALITY OF MIDWIFE PRIMARY HEALTH CENTRE IN

BANYU MAS DISTRI CT CENTRA L JAVA.......,.,.,.....

THE DEVELOPMENT OF TOURISM FACILITIES BASED ON VISITOR PREFERENCES IN

TOURISTS OBJECT KALI PANCUR......

SITUATIONAL LEADERSHIP AND COMPETENCY TOWARDWORK MOTIVATION AND ITS

IMPACT ON EMPLOYEE PERFORMANCE OF SERVICE COMPANY WORKING ATWELL

INTERVENTION DIVISION OF PERTAMINA HULU MAHAKAM ...........,..............,.. 94

THE IMPACTOf FLYPAPER EFFECT AND GROSS REGIONAL DOMESTIC PRODUCT TOWARD

REGTONAL EXPEND|TURE............... ........... 107

PUBLIC MARKET MANAGEMENT MODEL.BASED PUBLIC PARTICIPATION..........,...,....,,.,,,...,,..... 120

THE EFFECT OF GOOD CORPORATE GOVERNANCE AND TAX AVOIDANCE TO FIRM VAlUE......... 125

6

79

83

ISLAMIC ANDCRISIS:REVIEW OF

ISBN : 978-602-6597-30-1

BANKS STABILITY DURING GLOBAT FINANCIALCONVENTIONAL

LITERATURE

DO EXTENSIFICATION AND INTENSIFICATION ON REGIONAL TAX AND REGIONAL

RETRIBUTIONS HAVE IMPACT ON OWN-SOURCE REVENUE? (A CASE STUDY IN REGIONALREVENUE MANAGEMENTBOARD tN CtMAHI FtNANC|ALYEAR 2OL2-2O76],................................ 138

LOCAL WISDOM VALUES GOVERNANCE AS NON.FINANCIAL INTANGIBLE ASSETS IN

SUPPORTING INDIGENOUS PEOPLES' SUSTAINABILITY IN KAMPUNG PULO KABUPATEN

GARUT ................ .......... 744

tMPROV|NG DECtstON OF ELECTTONAL SCHOOL tN JEPARA ............... ............. 151

SOCIAL IMPACT AND READINESS OF VILLAGE APPARATUS TECHNOLOGY IN ADOPTINGVILLAGE FTNANCE SYSTEM.............. .......... 155

MONDAY EFFECT, WEEK-FOUR EFFECT AND JANUARY EFFECT IN INDONESIA......... ,.........,.,...... T67

THE EFFECT OF MEASUREMENT OF SHARIA SUPERVISORY BOARD'S SIZE, PROFITABILITY,

THE COMPOSITION BOARD OF INDEPENDENT COMMISSIONERS AND SIZE OF THE BOARD

OF COMMISSIONERS ON ISLAMIC SOCIAL REPORTING

ANALYSTS OF DtSTRTCT AND C|TY BASE SECTORS tN CENTRAL JAVA 2013-2017 .......................... 178

NORMATIVE COMMITMENT AS A MEDIATOR DISTRIBUTIVE JUSTICE AND PROCEDUMLJUSTTCE TOWARDS ORGANIZATTON CtTtZENSHtp BEHAVTOUR ........................ 183

MARKETING STRATEGY: MARKETING EXPENSE CONTRIBUTION TO PROFlTABlLlTY.................... 193

(STUDY ON TELECOMMUNTCATON COMPANY)......... .......... 193

INTERNAL FACTORS AFFECTING THE FINANCING DISTRIBUTION IN SHARIA BANKS ON

133

L73

202

THE EFFECT OF FINANCIAL LITERACY. FINANCIAL EXPERIENCE, AND LOCUS OF CONTROL

TOWARDS FINANCIAL MANAGEMENT ATTITUDE AND FAMILY INVESTMENT PLANNING

BEHAVIOR tN PURWOKERTO .................... 206

THE INFTUENCE OF TAX.DEFERRED TOWARD EARNINGS MANAGEMENT ........................ ,......, 2L6

ASSESING OF POST ADAPTATION IFRS ACCOUNTING RETEVANCE IN BANKING COMPANY...... 223

RELATIONSHIP BETWEEN PERSONALITY, ORGANIZATION COIVMITMENT AND SERVICE

QUALITY OF PHARMACIST IN BANYUMAS RESIDENT, CENTRALJAVA, INDONESIA...................... 230

THE EFFECT OF COMPETITIVE ADVANTAGE, INNOVATION AND MARKET ORIENTATION TO

MARKETING PERFORMANCE AND MARKET ORIENTATION AS A MEDIATING VARIABLE IN

THE RELATIONSHIP BETWEEN ENTREPRENEU RSH IP ORIENTATION AND MARKETING

PERFORMANCE ... ..........237

NEW EVIDENCE OF THE EFFECT OF TAX AGGRESSIVENESS AND CORPORATE

CHARACTERISTICS ON THE LEVEL OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE,.,,,,,.,.,. 245

THE INFLUENCE OF ISLAMIC SCHOLARS LECTURE ON MUSLIM RESPONSES IN THE

DECIS|ON OF THE USE OF tSLAMIC BANKS......................... ............................. 255

CONCURRENT SESSION 1't ICBAE UMP 2OI8

Banking And Economy (BE)

Concurent Session: I'r session, Friday, 3thofAugust 2018Moderator: Siti Nur Azizah, S.E., M.Si.Room ; Vice Rector's Room. 2ndfloor Rectorate Buildins

14.00- 14. I 0

Analysis of District and City Base

Sectors in Central Java 2013-2017

Mastur Mujib Ikhsani

t4.1.1-14.21

Student Entrepreneurial Program

Quality Enhancement Strategy at

Jenderal Soedirrnan University

Sri Lestari,

Laeli Budiarti,

Aldila Krisnaresanti

t4.22-14.32

The Impact ofFlypaper Effect and

Gross Regional Domestic Product

Toward Regional Expenditure

(Ernpirical Study on Provinces

in Indonesia 20 I 4-20 1 6)

Bambang Jatmiko,

Nano Prawoto,

Rini Juni Astuti,

Woro Tyas Pradipta,

Tri Indah Mulyani

t4.33-14.43

Islamic and Conventional Banks

Stability During Global Financial

Crisis: Revierl,' of Literature

Nunung Aini Rahmah,

Mohd Abdullah Jusoh,

Norlia Mat Norwani

t4.44-14.54

Social Performance lslamic Banks andDeterminant Factors: I mplementationol Sharia Enterprise 1'heory

Sri WahluniPuj iharto

:

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ISBN : 978-602-6697-30-1

THE INFLUENCE OF ORGANIZATION AND GOVERNANCE OF PUBLIC ACCOUNTING FIRMAND POLTCY DETERMINATTON OF FEE ON AUDIT QUALtTy .............................263

THE REVIEW OF UNDERSTANDING OF PRODUCT KNOWLEDGE DIFFERENCES..,,,.................,..... 283

ISBN : 978-502-5597-30-1

THE IMPACTOfFLYPAPER EFFECT AND GROSS REGIONALDOMESTIC PRODUCT TOWARD REGIONAL EXPENDITURE

(Empirical Study on Provinces In lndonesia 2014-2016)

Bambang Jatmikor),Nano Prawoto2),Rini Juni Astutir),Woro Tvxs pradiptat),Tri Indah Mulyanis)

Muhammadiyah University ofYogyakarta / Email: bambangjatrniko65@yahoo.comMuhammadiyah University of Yogyakarta / Email: pq3twSfSlq4!@yahoo.com

Muhammadiyah University of Yogyakarta / Email:r.ini herlambans@],ahoo.comMuhammadiyah University of Yogyakarta / Email:titilaras0T@gmail.com

Muhammadiyah Univelsity of Yogyakarta / Email: triindahmr.rlyani@gmail.com

Abstract: The purpose of this study is: a) to test and prove empirically GeDeral Allocation Fund(GAI)have a positive effect on regional expenditure in provinces in Indcnesia, b) to test and proveempirically Special Allocation Fr.rnd(SAF) have a positive effect o:r regional expenditure in provincesin Indonesia, c) to test and prove empirically Revenue Sharing Irund(RSir) have a positive effect onregional expenditure in provinces in Indonesia, d) to test and irrove crlrpirically Locally-GeneratedRevenue(LGR) have a positive effect on regional expcnditure in l.ovirrces in lndonesia, e) to test andprove empirically Gross Regional Domestic Product(GRDP) liave a positive effect on regionalexpenditure in provinces in Indonesia, f) to test and prove empiricrlly rrappen Fl)?aper Effect irprovinces in lndonesia. The research method in this study is descriprive lnethod that ain')s to tnalie thedescription systenatically, factually, and accuratelly towards fact. The population in this study is theprovinces in Indonesia until 2016. The result showed that The Genelai Allocation Fund arrd GrossRegional Domestic Product have not etlectto reglonal expenditure in province in Indonesia. TheSpecial Allocation Fund. Revenue Sharing Fund. Loca lly-Genelrted Revenuehave a posilive effect onregional expenditure in province in hdonesia. Judging:from value of adjusted R Square balance funds(General Allocation Fund, Special Allocation Frmd, Revenue Sharing Fund) is smaller than adjustedRSquare Locally-Generated Revenue. It rvas concluded that there .,r'ar no Flypaper Effect in theprovince oflndonesia within the periode of2014-2016.

Keywords: FlWaper Effect, Gross Regional Domestic Product, R'r,lional Il):penditure

INTRODUCTIONThe lmplementation ofregional autonomy since 2001 as a manilestxtion of the implernentation

ofdecentralization is characterized by applied Law Number 22 of 1.99c), about rcgional government andLaw number 22 of 1999 about regional autonomy rvhich was subsequently in law nurnber 32 tahun2004 and law number 33 of 2004. It has an impact on opcning Lri: opportunities for regionalgovemment to develop all forms of potential meas (endownmen flrctor). Fiscal decentralizatiol givesregional government the authority to take care of and manage the house|oid affair s, thus obligates thegovernment to managing optimally all its regional income. It aims to meet the needs of regionalspending to be used for improve public ser-vices, inuease regiontl devilopment, and advancing theregional economy for improve the welfare of its people, both frctr.r socii-,I ;lspect and economic aspectas a form of the implementation ol decentl alization.

According to law number'33 o12004, regional reverues r:re scrrrccd liom I.ocally-GeneratedRevenue, Balances Fund which are consisting of Genelal AllocaliJN I,r, ::r, Speciall Allocation Fund,and Revenue Sharing Fulrd, and other income. Locally-Generated 1{evcull is thc income eaured by theregions and collected bascd on the regional legulation ir accordancc wili, t:ie larvs regulation. BalanceFunds are sourced from State Budgetthat aliocated to the regions to 1ir;rd regional needs in the contextof decentralization implementatior. In principal fiscal decentralizatiorl cxpecls a lack of regionalgovemment dependency to the cental govemment, for the achieveluent ol independent areas inaccofdance with the objectives ofregional autonomy. (Hasan and Pennart,2012). Halim (2007) statesthat to minimize regional dependence on the cerlter decreasing, thet) Locally-Generated Reveuueshould be largest financial source sLrpported by central and regionrl t,.rlancing policies. Gen€rally,transfer allooation in developing countries more based on the spcndi g i,:rpect and less attertion to itsabilityto collect loal taxes. (Naganathan and Sivagnanam in Nurd;ni, et ai 2)14). This has an impact onlocal goverument that demand greater tmDfers fion year to yeal ro {}:; ,:,rtral government (Shah inNurdini., et al 2014). 1'he existence of a condition in rvhich tlr,: rr . i-.,rsc giyen by the regional

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govemlnentn to the balance fund for funding shopping needs greater tha]l the response to the use ofLocally-Generated Revenue is called with Flypaper Effect. FlJpaper effeet'gives more implication thatthe transfer will have an jmpact an increase in Regional Expenditure that is geater than the receipt ofthe fansfer itself. (Tumbull in Nurdini, et al, 2014)This can be evidenced from the 2012-2016 state Budget trends as illustrats(l in the following figure:

rrend state Buds"I?li"rlroru,*trirrions rupiah)

lHl(@,.6) te,21l (sr,ro) p5,3o (6,6,

Source :Data ofState Budget Directorate General ofRegional Firance (process ed),2017Based on the pictu-r'e above can be seen that from 2012-2016 r;gional revenue continues to

increase on average by l6% annually. Accompanying &e increase in Regionat Expenditure by 15,41 %annually. So it can be said that the increase in regional income lbllowed by expenditue of regionalspending. Meanwhile, regional income that comisting of Locally-Generated Revenue, Balances Fund(General Allocation Fund, Special Allocation Fund, Revenne Sharilg Fund), and other legitimateincome can be seen composition in Figure below:

. Figure 2.

Regional Income Composition Trend 2012-201e(in trillion rupiah)

i*fi r r-ll

600

'q .t-.1, J* ,ffi* Jr

2072 2013 2014 2015 20L6

! Other Lesltlmate lncome

€o,€i 71547

447,73 499,74

1L2,75

3At,O7

83,26

1,40,27

432,79

109,28

229,63

50102

196,86

Source :Data ofRegional Governrnent Budget Directorate Genenl ofRt:gional Finance (processed),2017

:iIn the picure cboveGeneral Allocation Fund has an a\.irflgc:i,icr,iasl' of 19,76% annually.

Meanrvhile, the average increase in the Balancing fund, is l2,42Yu al,.Lr..lly. Althougfi. the ratc ofincrease in balancing fund is smaller than General Allocation Fr,xld, the por.tion of balancing fund ismore dominant each year.

Directorat general of fiscal balance-ministry of finance states that although fiscal capacity isrising, its presentage (regional finance) is still about 20% oftotal regional budgetthroughout Indonesia.Then, local taxes and levies are only about one-fiflr of the total capacity. That is, dependence ontransfer funds is still high around 80% (Business Indonesia). In addition to using the variable ofLocally-Generated Revenue and Balancing Fund (General Allocation Fund, Special Allocation Fund,Revenue Sharing Fund) which refers to the research conducted-by Nurdin, et al (2014) about thefl,paper effect analys on General Allocation Fund, Special Allocation Fuod, Revenue Sharing Fund,and Locally-Generated Reverlue on district/municipal spending in west java, researchers used oneadditional variable that is Gross Regional Domestic Product (GRDP) thxt reflects economic groruh inan area. Ifeconomic growth in$ease then the income received will increaie \vhich means the allocationof regional spending will be greater. The GRDP variable refers to Tsk;rndnr (2012) study of flypaper

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effect on unconditional gant. So, researchers intflested in preparing research with the title "Thelmpactof Flypaper Effect And Gross Regional Domestic product Toward Regionar Expenditwe,, (empiiicalstudy on provinces in lndonesia 2014-2016). Refering to the background oi the above r.eiearchproblems proposed are as follows: a) whetherthe General Allocation Furd have a effect on regionalexpenditure on provinces in Indonesia, b) rvhether the Special Allocation Fund have a effeit onregional expenditure on provinces in lndonesia, c) whether the Revenue sharing Fund have a effect onregional expenditure on provinces in Indonesia, d) whether the L,ocally-Generated Revenue have aeflect on regional expenditure on provinces in Indonesia, e) whether theGross Regional DomesticProduct have a effect on regional expenditure on provinces in Indonesia, 1) whether-happen flypapereffect on provinces in Indonesia.

LITDRATURE, REVIEW AND HYPOTHESIS DEVELOPNIENT

Stervardship TheoryDonaldson and Davis in Raharjo (2010) explained that Stewardship Theory describes a situation in

which managers are not motivated by individual goals, but motivated by goals or target related to theinterest of the organization. Based on these explanation, this theory illustrates the si.ong relatiolshipbetween satisfactiofl and the success of the organization in achiwing its target or objeitives. plblicsector organization have a purpose to provide service to the public (public) and can be accountable tothe public. Thus, (stewardship Theory) can be applied in a special model ofpublic sector organization.Regional Autonomy

Law number 32 of 2004 article 1: defines regional autonomy us the right, authority, and obligationofautonomous regions to regulate and manage theif own governrnental affiirs and the interests oflocalcommunities in accordance with the laws and regulations. Salarvali, et al (2016) states that the purposeof the provision of regional autonomy is to provide opportunities for regions in regulatlng'andmanaging their own households to improve the efficiency and effbctiveness of gor"-un.. fur fublicservices and development implernentation.Fiscal Decentralization

Larv nLtmber 33 of2004 on financial equilibrium between the ceniral government and the regionalgovernnlent states that decentralization is the hand over of authLrrity by the centxal government toautonomous regions to regulate and manage government affrirs rithin thi system of thJ Unitar.y Stateofthe Republio of Indonesia. One form of implementation of fiscal decenlralizafion in indonesii is thecreatjon of Regional Revenue Budget, which is a major fiscal policy instrument to demonstratecapacity and regional capabilities (Salawadi, et al 2016).Flypaper Effect

Flypaper Effect according to Iskandar (2012) is a condition where govcmment spending caused byhansfer funds has a larger stimulus compared to government exPenditure.rur.,l by ot"n in.o-".Nurdini, et al (2014) states that flypaper effec1 occus when thr: influence given by equalization ortransfer fund (General Allocation Frurd, Special Allocation Fund, and Revenue Sharing Fund) onregional expenditure is greater than the effect ofLocally-Generated Revqrue on regional expenditrue.

Hypothesis Development:

1. General Allocation Fund widr regional expenditure:The allocation ofGeneral Allocation Fund in a particular area js based on thc size ofa fiscal gap in

a region, which is the differences between fiscal need and flscal capacity. Regions with large fiicalpotential but smaller fiscal needs will obtain relatively smaller General Allocation Fund allocation.Likewise, region with little fiscal pote tial bur Iarge fiscal neecis will rccive a relatively large ofGeneral Allocation Fund allocation

The greater the fiscal needs of an area, then the regional spending in the regions will be even$eater (Nurdini, et al2014). Ifthere is an increase in the allocation ofCeneral Atlocation Fund, thenthe expenditure issued by the government will also increase (Jotianis, 2014). The research conductedby Jolianis (2014), Kusuniadewi and Rahman (2007), Iskandar (2012), rLnalia, et al (2015) stares thatthe relationship betweenceneral Allocation Fund to spending is positivc.ly sig[ificant. Based on theexplanation, the hlpothesis formulation in this research is;Hypothesis I :General Allocation Fund has positively effect on regional expenditure in province inIndonesia.2. Speciall Allocation l'unds with regional expenditure

Speciall Allocation Funds is one part ofthe transfer ftlnd which is ofrelatively smaller value andcan oly be used in funding special activities that are part ofthe natiolal pliority program rvhich is the

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regional affairs.speciall Allocation Funds is allocated to finance the needs of public facilities andinfrastructures that have not reached certain standards, or are useful for accelerating development in anarea. It means thatspeciall Allocation Funds as a part ofregional income is needed to meet the need formore specific regional expenditure. (Amalia, et, al 2015). The research conducted by khoiri and hasan(2015), amalia et al (2015), liando (2017), ,uliana et al (2017), rosminar et al (2017) states thatspeciallAllocation Funds is positive significanly influenced the regional expenditure on province in indonesia.3. Revenue Sharing Fund with regional expenditure

Revenue Sharing Fund is one of the regional revenues whose funds are soruced fiom taxes andnatural resources, the amount of Revenue Sharing Fund depends on the contribution of localgovernments in generating revenues derived from local taxes and natrual resources. TheRevenuesharing Fund received by the regional govemment has a greatel percentage ofrevenue than the cenfalgovemment.Revenue Sharing Fund will be used by each region for the dvelopment and improvementof community/social welfare, which is realized through regional expenditure. So, the biggertheRevenue Sharing !'und then the greater the spending area (Nurdini, et al 2014). The reasearchconducted by Yusriadi (2010), Sasana (2010), Sukartono (2010), Iskandar (2012), Basri and Riswandi(2014), states thatRevenue Sharing Fund has positively and significant influence on regionalexpenditure. Based on the explanation, the hlpothesis that can be formulated is :Hlpothesis 3: RevenueSharing Fr.urd has positive et'fect on regional expenditure on provinces in Indonesia.4. Locally-Generated Revenuewith regional expenditure:

The hypothesis proposed by Maimunah and Akbar (2008) suggest that local revenues (especiallytaxes) will have an impact on local govemment expendihfe spending, oI better know as tax spendhypothesis. Areas with high Locally:Generated Revenue will have expenditures for high regionalexpenditue allocations (Jolianis, 2014). The higher Locally-Generated Revenue obtained by the region,the higher the ability of the region in order to meet irs own needs wjthout relying on the centralgovernment (Nurdini,20l4). The research conducted'by Iskandar (2012), Sasana (2010), Salawali et al(2015), Kloiri and Hasan (2015) were Locally-Generaled Revenue has a significant positive effect onregional expenditure. Based on these explanations, the hypothesis that can be proposed is:Hlpothesis 4 : Locally-Generated Revenue has a positive and significant effect on regional expenditureon the province in Indonesia.5. Gross Regional Domestic Product with regional expenditure:

Gross Regional Domestic Product has a fllnctional relationship u,ith Locally-Generated Revenue,because Gross Regional Domestic Product is a function of Locally-Generated Revenue, the higher theGross Regional Domestic Product per capita in an area, the potensial source ofrevenue in the area rvillalso be higher (Thamrin in Iskandar 2012). Economic growth reflected throughGross RegionalDomestic Product is one of the important goals of central and regional govemment that encourageeconomic de\€lopment. Economic development can be characterizcd by an increase in productivity andincome per capita population ftat can be reflected by the improvement ofpublic services both facilitiesand infrastmcture that can support economic activities. This is realized tkough regional expenditure. Ifeconomic growth increase, it will fucrease the regional expenditure to improve and eqr p facilities andinfrastructrue so that economic grorvht in the future will get better (Jaya and Drvirandra, 2014:). T\eresearch conducted by Sasana (2011), states thatGross Regional Dofirestic Producthas a positive effecton regional expenditure oflegency/city in west java. The similar research conducted by nain.runah andakbar (2008), states that Gross Regional DomesticProduct has a positive effect on regional expenditweon prov.inces in Indonesia.6. FJpaper Effect with regional expenditure

F)?aper effect according to Iskandar (2012) is a condition where the stimulus to regionalexpenditure caused by changes in transfer funds fi-om the central govemment is greater than thestimulus caused by the original incorneof the region. Nurdini, et al (2014) thates that if Locally-Generated Revenuegives more influence to regional expenditure than the effect given by balancingfund (General Allocation Fund, Special Allocation Fund, and Revenue Sharing Furd) to regionalexpenditure is called "Flypaper Effect". While this is contra[y to the concept of decentralization andregional autonomy that requires regional government to be more indpendent and less dependent oncentral government (lskandar, 2012). According to Jatrniko (2016) the occunence of the FlypaperEffect reflects that the area is are not yet self-sufficent. The research conducted by sasana (2010) showsthe result that fly?aper effect occurs, rneaning that regional expenditru'e is more dominated by GeneralAllocation Fund revenue is diflerent lrom revenue of Locally-Generated llevenue. This is in line withthe research conducted by Nurdini, et al (2014), Iskandar (2012), Salawali, et al (2016) and Jatmiko(2016), which states that flypaper effect accurs in each area studied. Based on the above explanation,the hypothesis proposed are:

hypothesis 6: there is a flypaper effect on regioral expenditure in the province oflndonesia.

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Independent Variable

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Dependent Variable

Produk Domestik Regional Bruto(PDRB) fi5)

Figure:3Research Model

RESEARCH METHOD

The research method used in this research is descriptive method that aims to create a systematic,factual and accurate descriptiorl of the facts. The population/sub.ject investigated is the province inIndonesia until 2016. The object studied in this reseiuch are variable data of General Allocation Fund,Special Allocation Fund, Revenue Sharing Fund, Locally-Generated Revenue, and Gross RegionalDomestic Product (GRDP) as independent variable.The dependen variable uses the variable data ofRegional Expendihue on the realization report of Regional Revenue and Expenditure Budget. Tlpesand data sources, the tlpe ofdata used in this study is secondary data. Secondary data is data alreadyavailable and collected by other parties. The data taken from this research comes Aom the realizationreport ofprovincial of Regional Revenue and Expendittre Budget 2014-2015. The data will be used tosupport the variable used in this study. The sampling techique used is purposive sarnpling which usescertain consideration, namely: a) provincial govemment which has pr.rblised the realization report ofRegional Revenue and Expenditure Budget for 3 consecutive year that is 2014-2016, b) provincialgovemment in Indonesia which has data of Gross Regionai Domestic Product during 2013-2015 onwebsite of Central Bereau of Statistir.

Sampling technique, the collection of data in this research using documentation method bycollecting all secondary data and all information used to solve the problems that exist in tltisresearch.Data collection of Regional Revenue and Expendih:re Budget is realization report on thewebsite of Ministry of Finance Directorate General of Fiscal Balance of central and regionalgovernment is wwwdjpk.deokeB.so.id and data of Cross Regional Domestic Product on website ofcentral Bereau of Statistic that is www.bps.eo.id. Data analysis method used is multiple linearregression zrnalysis by using SPSS. Data analysis techniques, data analysis methods used in this studyas a procedure or techlique to test the hypothesis that has been proposed. The method used isdescriptive statistical analysis, classical assumption test (nonnality test, multicolirearity test,autocorrelation test, heteroscedasticity test). $/hile the hypothesis test in this study using multiplelinear regression analysis, t test, ftest. and test coelficient of determination,

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General Allocation Fund (GAF)(x1)

Special Allocation Fund (SAO(x2)

Revenue Sharing Fund (RSF)(x3)

Locally-Generated Revenue(LGR) (X4)

Gross Regional DomesticProduct(GR-DP) (X5)

ISBN : 978-602-6697-30-1

RESULTS AND DISCUSSIONBased on the criteria described in previous chapter, out of 34 provinces in Indonesia recorded in

the Ministry ofHome Affairs up to 2016, there were 32 samples of provinces, This is because there are2 Provinces that have not published their Regional Revenue and Expenditure Budget, namely southeastSulawesi and Bali in 2016. Data taken from the realization report of Regional Revenue anclExpenditure Budget for each region are Locally-Generated Revenue and Balancing Funds (GeneralAllocation Fund, Special Allocation Fund, Revenue Sharing Fund).Here is tlre composition of Locally-Generated Revenue and Balaucing Funds in 32 Provinces in Indonesia of 2014-2016. Based on thefollowing figure it can be seen that in 2014. the composition of Locally-Generated Revenue in someprovinces is much largei than the composition ofbalancing funds, such as DKI Jakarta, West Java andEast Java.Wbile some other provinces have a larger balance of funds compared to the composition ofLocally-Generated Revenue, such as Aceh, Riau, West Kalimautan, Papua and West Papua.

Figure 4.Comparison of Locally-Generated Revenue and Provincial Balancing lr-und in Indonesia Year

2014

, 1,[. 1,,,,..1r,,,. ..,,sigi;* ; EgiE:iii iEiisi!; i::3 PE E ; E E; Ij J; S i: i

" i E i r ; s ; * : r i a a a - E i" ::3::I!"".j"9 6 Ei -ad

Source: Data is processed from Realization Report of Regional Revenue and Expendihre Budget Year2014

Based on the data liom the figure below, it can be seen that there are several provinces thatexperienced a decrease in balancing funds and increasing the amount of Locally-Generated Revenuesignificantly from the previous year, such as DKI Jakarta, West Java, Cenhal Java and East Java. Inaddition, there iue still some Provinces whose funding composition is greater than the composition oflocal ly-Gen erated Revenue.

Figure 5.Comparison ofRegional Revenues and Provincial Budgets in Indonesia 2015

.l0o@000

25oOO00o

20@o000

15000000

10000000

50ooo00

,.L,.h...ru-.-,trrEsqEi!!*a; c r t E,r!g E 5

'g9.?'Ef;idd B i;iE d 6^r

B

Source: Data is processed from Realization2015

Report of Regional Revenue lnd Expenditure Budget Year

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Based on the data liom the figure below, it can be seen that there are several provinces thatexperienced a decrease in balancing funds and increasing the amount of Locally-Generated Revenuesignificantly lrom the previous year, such as DKI Jakarta, West Java, Central Java and East Java. Inaddition, there are still some Provinces whose funding composition is greater than the composition ofLocally-Generated Revenue.

Picture:6Comparison of Regional Revenues and Provincial Budgets in Indonesia 2016

II

..,r. .. ll,.It..1,.,.--,,,....r.,....-,,:

i i ! ;: tiiii : : iii iii ii : i; ii

j : j i ii

33 ". is * -"-:'ISil:;;!iil ! ;:

i_ d". .-6di

Source: Data is processed from Realization Report of Regional Revenue and Expenditure BudgetYear2016

Based on the above picture and gomparison in the previous two images, namely in 2015 and2014, it can be seen that the composition of Locally-Generated Revenue and balancing funds as asource of regional revenue has alwals fluctuated in every province for the last 3 years.There are someprovinces that have larger Locally-Cenerated Revenue than counterpan funds, whereas in some otherprovinces the balance offunds is geater than the amouni ofLocatly-Generated Revenue.So researchershave not been able to conclude whether fiere Fl)?aper Elfect on the proviuce in lndonesia. Therefore itis necessary to test using the data of all variables in order to know rvhether or not the flypaper effectoccurs.Research on 32 Provinces in Indonesia for 3 consecutive years produce 96 data that can beprocessed, in data processing there are 17 data ofoutliff province so that data can be processed is as

much as 79 data ofprovince.Researchers perform logarithm data on General Allocation Fund, Special Allocation Flmd,

Revenue Sharing Fund, and Locally Generated Revenue and regional expenditure variables. This isbecause the data ofthese five variables have a very long range ofvalues to Gross Regional DomesticProduct data. The descriptive statistical test presented in this research is about minimum value,maximum value, mean value and standard deviation for General Allocation Fund, Special AllocationFund, Revenue Sharing Fund, and Locally Generated Revenue(in millions of rupiah) and GrossRegional Domestic Product as well as dependent va able that is Regional Expenditure (RE).Descriptive statistical test resul ts are the lelow:

Table 1. Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

GAF 't9 20568.00 1866548.0C 1042815.3418 346210.36682

SAF 79 1038.00 7 s96342.0C s42s47.0633 1261587.93907

RSF 79 20767,00 419497 t.0t 5555S5.7215 785830.7 4243

LGR '79 11834.00 17042895.0C 2688954.4304 3616014.637 86

GRDP 79 -10.15 12.52 4.9881 3.5?085

RE 79 642365.00 2762t964.0t 49537 92.3038 47 0)_97 6.06384

Valid N (listwise) 79

Hlpothesis Testing Results

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Table 2.

e Linear Test Results

Model

Unstandardized Coeffi cients Standardized Coeffi cients

T sig.B Std. Error Beta(Constant.l '7 .064 .503 14.036 .000GAF LN -.038 .040 -.03 5 -.93 8 .352SAF LN .096 .01 5 .209 6.525 .000RSF LN .058 .02a .106 2.891 .005

LGR LN .486 .023 .822 20.715 .000GRDP -.030 .007 -.149 -4.348 .000

a. Dependent Variable: Regional Expenditure (RE_LN)Source : Output SPSS 16,2018

Based on Table 4.7. above, obtained the regression equation as follows:

BD=7,064- 0,03SXr +0,096X2 +0,058Xs +0,486Xa -0,030X5 +e

1 General Atlocation Fund to Regional ExpetrditureThe result of hypothesis testing showsrthat the variable of General Allocation Fund has no effect

on regional expenditure with sig value 0,352> c i0,05) and negarive sign.The General Allocation Fundis a balancing fund sourced from theRegional Revenues and Provincial Budgets whose allocation aimsto smooth the financial capacity of the regions to frnance their expenditue needs as a form ofdecentralization implementation.However, according to Iskandar (2012) the General Allocation Fundhas an adverse impact on the flow of transfers, as local governments tend to use General AllocationFund with a larger amount than using their own local funds to finance their spending needs.While thisis contrary to the principle of decentralization that expects independence ftom eaih region with nolonger dependent on the cental goyernment. The rejection of the first hypothesis shows that theprovincial govemment no longer uses General Allocation Fund as the primary source to financespending needs-This study supports previous studies conducted by Susilo and Adi (2007), Shiddieqyand Afriana (2013), Nur (2015), Sriwahyuni (2010) and Setyorini (2013).2, Special Allocation Fund to Regional Expenditure

_ The.result of the second hypothesis testing shows that the Special Allocation Fund has a positive

and significant impact on regional expenditure in the province oflndonesia with the sig value;f0.000<o (0'05) and is positive.The Special Allocation Fund is only used to finance the expenditure needs ofnational priorities and become regional affairs related to the social rvelfare, such as spending on publicservices and the provision of adequate facilities and inftastructure so that later invesiors are interestedto invest their capital in the area. The more investors who invest their capital, it can increase theregional income that can be used to finance the needs ofthe region, so that the opporhrnity for the areato be more developed will be greater.The results of this study support previous research of Khoiri andHasan (2015), Liando (2017), Amalia., Et al (2015), Sasana (2011) and yuliana., Et al (2017).3. Revenue Share Fund on Regional Expenditure

The result ofthe third hlpothesis test shows that the revenue sharing has positive and significantimpact to regional expenditure on the province in Indonesia with the sig value of 0.005 <d (0.05), andis positive. Revenue Sharing Fund is one of the balancing funds derived fromRegional Revenues andProvincial Budgets tevenues and the allocation is different ftom General Allocation Fund and SpecialAllocation Fund, which is based on the percenlage ofrevenue share in accordance with the contributionoflocal governrlents to the central govemment whose source comes from taxes and natural resources,each region in Indonesia.Therefore, the amount of Revenue Sharing Fundallocation is based on thesuccess of a region in the income tax and natural resources of each region. If a regiou gets a substantiallocal tax revenue and natual resource rnanagement results, then the allocation of Revenue SharingFundwill also be large.Similarly vice versa if local tax revenue and the results of nahral resourcemanagement small, then the Revenue Sharing Fund received is also small. The potential of eachprovince in Indonesia varies, so the income of Revenue Sharing Fund in each Province also varies. Theresults of Revenue Sharing Fund receipts can be used to improve the development and prosperity ofeach region.Development and other expanditues related to regional wealth management r.vill have an

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effect on the size of regional expenditure. So the greater the Reyenue Sharing Fund, the greater theexpenditue of the region. This research supports previous reseaLches, namely Mulyati and Yusriadi(2017), Nurdini., et al (2014), Sukartono (2010), Basri and Riswandi (2014), Sasana (2010), Inayatiand Setiawan (2017) , and Iskandar (2012).4. Local Revenue on Regional Expenditure

The result of the fourth hypothesis test shows that the local revenue is positive an<l significant tothe legional expenditure in the provirrce in Indonesia with the sig value o10.000 <d (0,05) ind positivesign.Locally-Generated Revenue is one of the sources of regional revenue that is used to meet theneeds olregional spending. Regional expenditures shall be undertaken by the Regional Government forthe activities of governance, regional development, public services, and enhancement of the regionaleconomy so as to enrich its commrmity which is a [ranit'estation of the implementation ofdecentralization.The implementation of decentralization in Indonesia requir-es every local governmentto become an independent regior and not dependent on the central Govcrlment. According to Halim(2007) to minimize regional dependence oD the center, the original revenue should be the largest sourceof linance in terms of financing Iocal expenditure needs.Therefore, tlte greater the regional budget, thegreater the Locally-Generated Revenue that must be owned by the area. lncreasing the amount ofLocally-Generated Revenuein the Province in Indonesia each year illustrates the perfomrance of theregion which also increases anlually in exploring the potential possessed by the region to be Locally-Generated Revenue.One of the biggest sources of Locally-Generated Revenueis local taxes, so if thereis an increase in Locally-Generated Revenuethen the awareness oftaxpayers to pay taxes also increases.Furthennore, the task oflocal goverrunent is to improve public facilities so that people benefit liom thetaxes that have been paid. The results of this study are consistent and in line with previous researchconducted by Maimunah and Akbar (2008), Nurdini,et. al (2014), Iskandar (2012), Jolianis (2014),Sasana (2010), Kusumadewi and Rahman (2007), Afrizawati (2012), Khoiri and Hasan (2015).5. Gross Regional Domestic Product to Regional Expenditure

The result of the fifth hypothesis test shows that Grdss Regional Domestic Product (GRDP) has noeffect to regional expenditure on Province in lndonesia wjth sig value of0.000 <o (0,05) and negativeregession coefficient, The rejection ofthe fifth hlpothesis may be due to a less significant economicgroMh that does not result in a source ofrevenue that can be allocated for expenditure allocations.lnaddition, this does not mean that the economic grordh reflected by theGross Regional DomesticProduct is not a reference in the budget preparation process in Regional Revenue alld ExpenditureBudget,because according to Tuasikal (2008) there are certain other factors tlat can affect the budgetsuch as the process ol formulating the General Policy of Budgetin every region which in addition topaying attention to the macro economic condition of the region also pay attention to the political andsocial conditions in the region.In addition, fu tablel. Descriptive statistics can be seeu that the averageeconomic groMh for 3 lears is 4.9881%. Where the percentage ol economic growth is still low, sonaturally if GRDP does not positively affect the regional expenditure.The rssults of this study supportprevious research by Dewi and Suyanto (2015) The results ofhis research proye that economic groMhis reflected through GRDP does not afl'cct the capital expendihre. This is because economic grouthcan be created from infrastucture or good facilities and intashrcture, ll&ere i[fi'astructure andinfrastructure come from capital expenditures. While in this study, local governments do not allocatecapital expenditure on iarget. This research supports previous research conducted by Tuasikal (2008),Jaya and Dwirandra (2014), Darrvanto and Yustika (2007), Putro (2010) and Adirviyana (201 l).

Coefficient of Determination Table. 3 Coefficient Determination Test Results

Model R R Squale Adjusted R Square Std. Enor ofthe Estimate

I .969 .944 .93 6 .18035

a. Predictors: (Constant), GRDP, LGR_LN, GAF_LN, RSF_LN, SAF_LNb. Dependent Variable: Regional Expenditure (RE_.LN)

Source: Outpr.lt SPSS 16,2018

Based on the above table, the adjusted value ol R ^ 2 is 0.936, which mealls rhat 93.6% ofregional expenditue variable can be explained by 5 independent variables General Allocation Fund,Special Allocation Fund, Revenue Sharing Fund, LocalJy-Generated Revenue and Gross RegionalDomestic Product (GRDP), Meanwhile the rest (100% - 93.6%= 6.1%) is explained by other variablesoutside the research model.

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6. Flypaper Effect to regional exaenditureThe coefficient of determination test is also used to test the sixth h)?othesis (H_6) whether or not

flypaper effect in the province in lndonesia. According to Nurdini, .t ui, lzot+y flypaper effect testingis done by comparing the adjusted R square variable General Allocation runa lcnr),SpecialAllocation Fund (sAF), and Revenue Sharing Fund (RSF) with adjusted value R square Loially-Generated Revenue (LGR) variable. Ifthe adjusted R Square value of GAF, sAF, and RSF variables lsgreater, then the sixth hypothesis (H_6) is accepted. The result of comparison between determinationcoefficient test (GAF, SAF, and RSF) with LGR to regional expenditure is presented in the table below:

Table 4.

Comparisor.r of coefficient test resultsDetermination of cAF, SAI, and RSF with

to

Variabel Adjusted R Square

GAF

0.49'7SAF

RSF

LGR 0.898

Source: Secondary data processed, 2018

Based on the above table, the adjusted R Square (GAF, SAI, and LGR) simultareously to theregional expenditure of0.497 which means that GA,F, SAF, and RSF simultaneously affect the iegionalexpenditure of 49.'7%. Meanwhile, the adjusted R Square LGR to regional expenditure is 0.898 whichmeans that LCR has an effect on tegional expendihue of 89.8%. Based on the results ofthe comparison,it can be seen the simultaneous effect of GAI, SAF, and RSF on local expenditure is smaller than theeffect of LGR on regional expendihue (0.497 <0.898).So the sixth hypothesis (H6) is rejected, anrlstates that there is no flypaper effect phenomenon in the province in Indonesia. Flypaper effect is acondition in which the influence given bybalancing funds (GAF, SAF, RSF) on regional expenditue isgreater than the effect of LGR on regional expenditure. This is, of course, contary to the principle ofdecentralization and the principle of autonomy that denmrds the independence of local governmentsnot to rely on the central govemment.

Based on the results ofresearch conducted in 32 Provinces in Indonesia, found the fact that there isno fllpaper effect that reflects that during the year 2014-2016 in general the province in Indonesia hasbeen financially independent because it is able to rely on its own local finaace in running the wheels ofgovemment, because the provincial government in 2014-2016 has been able to optimize the Locally-Generated Revenue rvhich is then used as the main source in financing the needs ofregional spending.This study supports the research of Kang and Setyawan (2012), Liatrdo (2017), Khoiri and Hasan(2015), Rahmawati (2015), and Mentayani., Et al (2015).

CONCLUSIONS, LIMITATIONS, SUGGESTIONS AND IMPLICATIONSConclusion:

Based on research on 32 samples ofProvincial Government in Indonesia duing 2014-2016, it canbe concluded as follows:1. General Allocation Funds and Gross Regional Domestic Products have no effect on regional

expenditure on Provinces in Indonesia.2. Special Allocation Frmds, Revenue Shar-ing Funds, Local Original Income have a positive and

significant impact on regional expenditure on the Province oflndonesia.3. Viewed from the Adjusted R Square value of lesser funding (CAF, SAF, RSF) compared to

Adjusted R Sqiare LGR, it is concluded that no flypaper effect occurred in Indonesia Provincewithin 2014-2016 period.

Further Research Suggestions:Based on the conclusions generated in this sh.rdy, the authors convey some suggestions that are

expected to be useful for further research, including:1. Further research is expected to expand or expand the sample such as researching the distdcts /

cities in lndonesia so that the results ofhis research is expected to provide knowledge about whichareas are already independent or not.

2. Futlher research is expected to use other methods in research such as direct interviews with relatedparties in the preparation ofRegional Revenue and Expenditure Budget.

LGR

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3. Further tesearch is expected to use more diverse independent variables, in terms ofsize or othertypes of local revenue as well as other non-financial variables such as aspects of governmentbudgeting policy as well as public policy aspects.

Limitations of Research:Researchers realize that there are still many weaknesses and shortcomings in this study. causedby

the existence ofsome limitations ofresearch, including:1. The information contained in this research is incomplete, because in testing the hypothesis only

uses data taken from the realization ofRegional Revenue and Expenditure Budget iiport of eachProvince, so it is not followed by reality or problem which actually happoned in that province.2. Lack ofvariables that cause the increase or decrease of Locally-Geneiited Revenue and BalancingFund.

3. Lack offactors that suppoft the reason rvhy economic growth in Indonesia is still considered low.Implications:

Based on the results ofresearch that has been done, is expected to provide a beneficial impact forthe parties interested tekait. The implications that arise are as follows:I The Provincial Governrnent is expected to contiuue to maintain in orcler to avoid fllpaper effect by

continuing to optimize the original opinion of the region used to finance the needs of shopping inthe coming years so as to achieve the objectives of decentralization optimally.

2. Provincial Government is expected to continue to improve its performance by performing its dutieswell as community stakeholders so as to create a conducive and prosperous community.

3. Provincial Government is expected to channel regional expenditure well to provide public servicesfor the community in the fonn of infrastruchrg facilities and good infrastructure and inaccordance with predetermined standards.

REFERENCESAdiwiyana, Priya. 2011. "The lnfluence of Economic Grolvth, Local Original Income, and General

Allocation Fund to Allocation of Capital Expenditure Btrdget",Joumal oJ Economics cmdBusines,s,

Afrizawati. 1012. "Flypaper Efect Analysis on Regional Expenditure in Regoncy/Cify of SouthStmatera". Joumal ofEcononisc andAccounting Infbnnation, 2(l), pp: 2l-30.

Amalia, Wia Rizqi., Wahyudin, N., and Nordiansyah, M. 2015. "Fh)paper Effect on Locally-GeneratedRevenue, General Allocation Fturd, and Special Allocation Fund on Regional Expenditurein Regency/City in Province of South Kalimantan(2009-2013)" . Journal ofAccounting qndBusiness,l5(l), l-12.

Basri, Muhammad }Iasan and Riswandi. 2014 . "Does Flypaper Effect Occur in Aceh? Study MeasuresRegional Financial Independence". QE Journal,Yol. 03, No.04. Hal.l99-216.

Business ol Indonesia, Directorate General of Fiscal Balance of the Ministry ofFinance,BoediarsoTeguh Widodo: "Regional Must Be More Adult,,,http://kalimantan.bisnis.cor/read./201 70502/250/649674,/dirjeniperimbansan-keuau san-kemenkeu-boediarso-tesuh-widodo-daerah-harus-lebih-dervasa.Retrieved on June 20,2017.

Darwanto, and Yulia Yustika. 2007. "The Influence of Economic Growth, Locally-Generated Revenue,and General Allocation Fund to Allocation of Capital Expenditure Budget". NationalSymposium on Accounting X. 26-28 Jlly, Makassar.

Dewi, S, P., and Suyanto, S. 2016. "The Impact of Economic Growth, Locally-Generated Revenue,General Allocation Fund, Special Allocation Fund to Capital Expenditure in Central JavaProilace " . Journql ofAccounting,3 (l).

Halim, Abdul. 200'1. Regional Financial Accoluttitg. Jakarta: Salemba Four-

Hasan, P.P., and Permana, B. 2012. "lnlpact of Fiscal Decentralization lmpacts on RcgionalIndependence: Studies in Districts and 3 Provinces of West Java Province". Center forStudy and Education and Training ofApparatus I (PKP2A I) l,AN.

Inayati, N. L, and Setiawan, D. 2017. "Flypaper Effecr Phenomenon At Regional Expenditue Regency/ City in lndonesia " . F,qu.ity (Jounrul of Economics qnd l-inancc),1(2'),220-239.

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Iskandar, Irham.2012."FlypoperE/fecronunconditionalGrant'.Jou,uloJEconomicsDevelopment,I t3-t 31.

Jahniko, P. E. R. 2016. "The Effect of Balancing Funds And Revenue of rhe o.iginal Regions ToRegional Expenditr.u.e Ol Regency And City In East Java,,. Journal olEionomicsDevelopment, l4(1), 46-58.

Jolianis, J. 2014. "The [nlluence of General Allocation Fund and Locally-Generated Revenue toRegional Expenditue in Regency/Ciy in province of West Sumatera',. Journal ofPelangi. Tll\.

Kang, Y., & Setyawan, D. 2012. "lntergovernmental Transfer And The Flypaper Effect-EvidenceFrom Municipalities/Regencies InIn dones ia". Regencies htlndonesta.

Khoiri, A., & Hasan, R. 2015 . "Flypaper E//ecrand Regional Expendih:rein province in WestJava". Signifi cant: Jo urn o I of E c o n omi c s Science, 4(2).

Kusumadewi, D. A,,and Rahman, A. 2007. "Flypaper elfectonGeteral Allocation Funti ad Locally-Generated Revenueto Regional Expendihre in RegencyiCity of lndonesta". Journal ofAccounling and Auditing Indonesiq, ll(1).

Liando, I. I. 2017. "Factors Affecting Regional Expenditure In East J ava Districts,,. Journol of Scienceand Accounting Ris et, 6(.6).

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