Pengaruh Faktor Keuangan dan Karakteristik Pemerintah Daerah Terhadap Financial Distress (Studi Empiris Kabupaten/Kota di Provinsi Aceh Tahun 2015-2019)

Abstract

This study is a quantitative research that aims to obtain empirical evidence about the influence of financial factors (effectiveness ratio, efficiency ratio, solvency ratio and growth ratio) and characteristics of local government (decentralization degree, complexity of local government, area size and audit opinion) on local government financial distress in districts and cities in Aceh Province for the period 2015-2019 for 5 years. The data was obtained from the BPK and BPS. This research used a total sampling method with total sample of 23 districts / cities and used binary logistic regression analysis for analysis of the data. The value of desentralization degree and complexity of local government has a negative and significant effect on financial distress and the value of growth ratio has a positive and significant effect on financial distress. While the value of solvency ratio and area size has no significant effect and positive on financial distress and the value of effectiveness ratio, efficiency ratio and audit opinion has no significant effect and negative on financial distress.

The Influence of Financial Factors and Local Government Characteristics on Financial Distress

“…According to the research of Wulandari & Arza (2020) and Sari & Arza (2019), the region's size significantly influences financial distress. This research differs from the results of Zakia & Setiawan (2021) in that the region's size does not significantly affect financial distress. Therefore the hypothesis is as follows.…”

“…Researchers Elfiyana & Arza (2022) also asserted that the ratio of efficiency to financial distress has a significant influence with a positive coefficient direction. However, this differs from the research of Zakia & Setiawan (2021) and Wulandari & Arza (2020), which is produced if this ratio does not influence financial distress. Therefore the hypothesis is as follows.…”

“…That can influence financial difficulties in local governments. One of Zakia & Setiawan's (2021) research results used eight indicators that affect financial distress. Elfiyana & Arza (2022) use six indicators that affect financial distress.…”

“…Five, The regional government can be said to be ineffective with a predicate of less than 60%. According to Zakia & Setiawan (2021), the effectiveness ratio has no significant effect on financial distress. In contrast, Elfiyana & Arza (2022) stated that the value of the effectiveness ratio of local governments significantly influences significant financial distress.…”

“…According to Elfiyana & Arza (2022), Rusdi & Fuad (2018), as well as Wulandari & Arza (2020) that the growth ratio of regional natural income does not affect the symptoms of financial distress. Differently, according to Zakia & Setiawan (2021) and Eliu (2014), research was produced that this ratio influences the number of financial distress. Therefore the hypothesis is as follows.…”