Fiscal Determinants Of Stress In The Maluku Islands Region

The purpose of this study is to identify and assess the impact of transfers to regions, Local Own-Source Revenue, Gross Regional Domestic Product (GRDP), population, and Construction Cost Index (CCI) on fiscal stress in regencies / cities in Maluku Province. The data was collected from the Directorate of Financial Balance of Ministry of Finance and Statistics Indonesia of Maluku Province during the period of 2015-2022 in 11 regencies / cities in Maluku Province. The data was analyzed using the fixed effect model obtained through the Hausman test using the panel data regression analysis method. The findings reveal that the transfers to regions and Local Own-Source Revenue have a negative and significant impact on the fiscal stress; where the higher the transfers to regions and Local Own-Source Revenue, the lower the impacts on the fiscal stress. Meanwhile, the CCI has a positive impact on the fiscal stress; indicating that in a geographically archipelagic region, the CCI was such an essential determinant in local expenditure in enhancing regional growth and community services.