Systematic Literature Review: Peran Pendapatan Asli Daerah dan Belanja Modal dalam Meningkatkan Kinerja Keuangan Pemerintah Daerah

Abstract

This study aims to examine the influence of capital expenditure and locally generated revenue (Pendapatan Asli Daerah/PAD) on the financial performance of regional governments in Indonesia. The study adopts a Systematic Literature Review (SLR) approach to systematically identify, evaluate, and synthesize relevant empirical studies addressing this issue. The SLR methodology ensures a rigorous and transparent process by following established guidelines in selecting and analyzing the literature. A total of 50 peer-reviewed journal articles were included in this review. The findings reveal that locally generated revenue plays a significant role in enhancing regional financial performance. An increase in PAD reflects greater fiscal capacity and autonomy, enabling local governments to better meet development objectives and public service demands. Furthermore, capital expenditure is also found to have a positive and significant impact on financial performance. Higher capital spending contributes to the development of infrastructure, strengthens regional economic structures, and enhances local competitiveness. These results imply that regional governments should prioritize strategies aimed at optimizing PAD through revenue diversification and improved collection mechanisms. Additionally, increasing the allocation of capital expenditure is essential to support sustainable economic growth and public welfare. This study also highlights the importance of effective, efficient, and transparent financial management practices in achieving long-term regional development goals.