THE EFFECT OF REGIONAL FINANCIAL REFORM, GOOD GOVERNANCE, POTENTIAL REGIONAL INCOME, THE ROLE OF INSTITUTIONS, ON REGIONAL INCOME ON REGIONAL CAPITAL EXPENDITURE

Abstract

This research is motivated by reform of regional finance, good governance, potential regional income, the role of institutions which are not yet optimal. This research was conducted at the Regency Government BPKAD in the Lake Toba Tourism area, North Sumatra Province. The purpose of this study is to analyze and examine descriptively and verification related to the influence of regional financial reform, good governance, potential regional income, the role of institutions on regional income which has implications for regional capital expenditures. The research method used is a quantitative method which is carried out descriptively and verification. The sampling technique was carried out by proportional cluster random sampling. Sources of data from primary and secondary data, by observation, distributing questionnaires, interviews and documentation. The analytical technique used is SEM analysis. The results of the research show that: 1. Descriptively, regional financial reform, good governance, potential regional income, institutional role, regional income and regional capital expenditure are in the category of good enough to good. 2. The results of the verification research show that regional financial reform, good governance, potential regional income, the role of institutions have a positive and significant effect on regional income both simultaneously and partially. 3. The results of the verification study show that regional income has a positive and significant effect on regional capital expenditures