PENGARUH PAD DAN DAU TERHADAP PERTUMBUHAN EKONOMI DENGAN BELANJA MODAL SEBAGAI VARIABEL INTERVENING PADA PEMERINTAH KABUPATEN/KOTA DI PROVINSI KALIMANTAN SELATAN

The purpose of this study is to examine and analyze how PAD and DAU variables are affecting economic growth both directly and indirectly. This paper is important because it differs from previous studies, which generally place economic growth as an exogenous factor, and the results still show inconsistency. While this research puts the variable of economic growth in endogenous position, that is as a factor influenced by public expenditure, which in this context allocation of capital expenditure. The focus of this paper is to describe and answer the question of how the impact of PAD and DAU on Economic Growth through the allocation of Capital Expenditures. PAD is an indicator of local government productivity that is influenced by local government innovation in developing productive assets. However, the results of this study indicate that PAD has no significant effect on capital expenditure allocation. PAD is also an indicator of regional independence in providing financing sources of regional development. Theoretically, the greater the PAD of an area, the more independent the region.  But for whatever achievement PAD, if there is inefficiency in the management, the amount of PAD will be absorbed for operational financing, so it does not affect the capital expenditure for investment purposes. DAU has a significant influence on capital expenditure and economic growth. The total effect of DAU on Economic Growth through Capital Expenditure is 0.359 or 36 percent. Indirect influence (0.082 or 82 percent) DAU is greater than direct impact on economic growth (28 percent). This proves that capital expenditure variables are significant as intervening variables in the context of this study.