Pengaruh Kemandirian Keuangan, Efisiensi Keuangan, Solvabilitas Anggaran dan Indeks Pembangunan Manusia terhadap Financial Sustainability Pemerintah Daerah di Seluruh Indonesia Tahun 2020-2023

Abstract

This study aims to analyze the effect of financial independence, financial efficiency, budget solvency and human development index on the financial sustainability of local governments throughout Indonesia. This study uses a quantitative approach with panel data from the Regional Government Financial Reports (LKPD) of provinces in Indonesia for the period 2020-2023. Hypothesis testing was carried out using the panel data regression method with the help of Eviews 14 software. The results of the study indicate that financial independence and budget solvency have a positive and significant effect on the financial sustainability of local governments. Conversely, financial efficiency has a significant negative effect on the financial sustainability of local governments. Then, the human development index does not have a significant effect on the financial sustainability of local governments. These findings indicate that regional financial management and regulation play an important role in driving regional financial conditions and performance. This study provides policy implications for local governments in improving financial performance in order to realize sustainable financial conditions.