Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition
This study examines the outcome of decentralisation reforms in Indonesia, focusing on the association between demographic characteristics and differences in the financial condition of local governments units. It investigates cross-sectional data pertaining to demographic characteristics and financia...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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University of Wollongong
2014-06-01
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| Series: | Australasian Accounting, Business and Finance Journal |
| Subjects: | |
| Online Access: | http://ro.uow.edu.au/aabfj/vol8/iss2/7 |
| _version_ | 1811279149012090880 |
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| author | Rusmin Rusmin Emita W. Astami Glennda Scully |
| author_facet | Rusmin Rusmin Emita W. Astami Glennda Scully |
| author_sort | Rusmin Rusmin |
| collection | DOAJ |
| description | This study examines the outcome of decentralisation reforms in Indonesia, focusing on the association between demographic characteristics and differences in the financial condition of local governments units. It investigates cross-sectional data pertaining to demographic characteristics and financial statements audited by the Supreme Audit Body of 419 Indonesian local government units for the fiscal year 2007. It utilises demographic attributes including scope of entity, location, tenure (date of entry), gender, human development index (HDI) and size of local governments to explain differences in the financial condition of Indonesia’s local government. Local government financial condition is proxied by quick ratio, debt ratio, services ratio, and ratio of local to total revenues. The results suggest that scope and location of local
government units help explain all of the financial condition variables. The findings further infer that local government units domiciled in Java tend to report better financial conditions relative to those domiciled in other islands. Our results also show that local government units with greater female populations and higher
HDI are more likely to have a local authority that (1) has better ability to finance their general services from their unrestricted net assets, and (2) has greater ability to earn more revenues from local sources. Finally, this study documents that the larger the population of a local government unit, the higher its liquidity position, the stronger its ability to funding general services, and the greater its possibility earning revenues from its local sources. |
| first_indexed | 2024-04-13T00:49:33Z |
| format | Article |
| id | doaj.art-19bf0aa263534cf69f3e3243bf57f3ac |
| institution | Directory Open Access Journal |
| issn | 1834-2000 1834-2019 |
| language | English |
| last_indexed | 2024-04-13T00:49:33Z |
| publishDate | 2014-06-01 |
| publisher | University of Wollongong |
| record_format | Article |
| series | Australasian Accounting, Business and Finance Journal |
| spelling | doaj.art-19bf0aa263534cf69f3e3243bf57f3ac2022-12-22T03:09:55ZengUniversity of WollongongAustralasian Accounting, Business and Finance Journal1834-20001834-20192014-06-018288109http://dx.doi.org/10.14453/aabfj.v8i2.7Local Government Units in Indonesia: Demographic Attributes and Differences in Financial ConditionRusmin Rusmin0Emita W. Astami1Glennda Scully2Universitas Teknologi Yogyakarta, IndonesiaUniversitas Teknologi Yogyakarta, IndonesiaCurtin University, AustraliaThis study examines the outcome of decentralisation reforms in Indonesia, focusing on the association between demographic characteristics and differences in the financial condition of local governments units. It investigates cross-sectional data pertaining to demographic characteristics and financial statements audited by the Supreme Audit Body of 419 Indonesian local government units for the fiscal year 2007. It utilises demographic attributes including scope of entity, location, tenure (date of entry), gender, human development index (HDI) and size of local governments to explain differences in the financial condition of Indonesia’s local government. Local government financial condition is proxied by quick ratio, debt ratio, services ratio, and ratio of local to total revenues. The results suggest that scope and location of local government units help explain all of the financial condition variables. The findings further infer that local government units domiciled in Java tend to report better financial conditions relative to those domiciled in other islands. Our results also show that local government units with greater female populations and higher HDI are more likely to have a local authority that (1) has better ability to finance their general services from their unrestricted net assets, and (2) has greater ability to earn more revenues from local sources. Finally, this study documents that the larger the population of a local government unit, the higher its liquidity position, the stronger its ability to funding general services, and the greater its possibility earning revenues from its local sources.http://ro.uow.edu.au/aabfj/vol8/iss2/7Demographic attributeslocal governmentfinancial conditionIndonesia |
| spellingShingle | Rusmin Rusmin Emita W. Astami Glennda Scully Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition Australasian Accounting, Business and Finance Journal Demographic attributes local government financial condition Indonesia |
| title | Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition |
| title_full | Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition |
| title_fullStr | Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition |
| title_full_unstemmed | Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition |
| title_short | Local Government Units in Indonesia: Demographic Attributes and Differences in Financial Condition |
| title_sort | local government units in indonesia demographic attributes and differences in financial condition |
| topic | Demographic attributes local government financial condition Indonesia |
| url | http://ro.uow.edu.au/aabfj/vol8/iss2/7 |
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