The Effect of Locally-Generated Revenue, Capital Expenditure, and Investment on Economic Growth in Lamongan (Indonesia), 2010–2019

Since economic growth is a macro indicator of successful development, all countries strive to get maximum economic growth to create public welfare, especially for developing countries. Therefore, using the example of a city in one such country, namely Lamongan in Indonesia, let’s examine the effects of local income, capital expenditure and partial investment simultaneously on economic growth. Thus, the object of the research is the influence of locally-generated revenue, capital expenditure, partial investment, and simultaneously economic growth in the Lamongan in 2010–2019.<br><br>This research was established with a quantitative approach. The data used are secondary data published by the Central Bureau of Statistics of Lamongan, the Regional Financial and Asset Management Agency of Lamongan, the Office of investment, and One-Stop Services, Lamongan in 2010–2019. The results of the study conclude that partially the locally-generated revenue variable has a significant negative effect on economic growth in Lamongan in 2010–2019, capital expenditure has a significant positive impact on economic growth in Lamongan in 2010–2019, and investment did not hurt economic growth in Lamongan in 2010–2019. Simultaneously, the locally-generated revenue variables, capital expenditure, and acquisition significantly affected Economic Growth in Lamongan in 2010–2019. This study’s results are expected to become information, reference materials, and references to develop and expand future research. For the Lamongan government, this research can be used as a necessary consideration and input to improve policies related to increasing economic growth of country.


Introduction
According to the author of [1], economic growth is a macro indicator of successful development. All countries strive to get maximum economic growth to create public welfare, especially for developing countries.
The authors of [2] explain that the indicator of eco nomic growth is the Gross Domestic Regional Prod uct (GDRP).
LocallyGenerated Revenue is income derived from the area and taken by the local government [3]. The financing used by the government for activities and development in a region depends on the income received by a part. If an area's payment is continuously increasing, the regional development will improve the facilities and infrastructure to support community activities.
According to the author of [4], the indicators of LocallyGenerated Revenue: 1. The results of local taxes. 2. The results of local retribution. 3. The results of separated regional wealth management. 4. The other legitimate local revenue.
According to the author of [5], capital expenditure is a cost incurred to acquire assets and can be used for more than one year, including maintenance costs that can increase capacity and quality.
The authors of [6]  According to the author of [7], an investment can be defined as a delay in current consumption for inefficient production over a certain period. The author of [8] states that foreign direct investment is not only limited to simple transfers of money, but has been expanded to be defined as a measure of foreign ownership of productive domestic assets such as factories, land, and organizations and other intangible assets such as technology, marketing skills, and managerial capabilities.
The author of [7] explains that investment indicators are as follows: A country always makes an effort to realize the maxi mum economic growth level to encourage its nationals to be better. Indonesia is a developing country with diver sity, including education, culture, ethnic groups, natural resources, social, and economy. The authors of [9] stated that LocallyGenerated Revenue is an indicator of local government productivity influenced by local government innovation in developing productive assets. The increase in LocallyGenerated Revenue can increase the govern ment budget for providing public facilities. Government spending is allocated through regional funds and can be measured through routine spending and development spend ing. Increasing local government spending will improve the economy of a region that is more focused on capital spending. Lamongan has abundant natural resources ex pected to optimize the potential contained so that regional income can increase.
The author of [10] states that LocallyGenerated Rev enue has a positive effect on economic growth, and Capi tal Expenditure positively impacts economic growth in Districts/Cities on the island of Sumatra. The authors of [11] state that partial investment does not affect eco nomic growth. LocallyGenerated Revenue does not affect economic growth in Kediri. The authors of [12] state that LocallyGenerated Revenue does not affect economic growth, the General Allocation Fund has a significant effect on economic growth, and the Special Allocation Fund has a substantial impact on economic growth. The author of [13] states that LocallyGenerated Revenue has a positive and significant effect on economic growth (Gross Domestic Regional Product (GDRP)). Meanwhile, capital expenditure has no impact on economic growth. The authors of [14] state that capital expenditure has a significant positive effect on economic growth. Meanwhile, investment has a significant positive impact on economic growth.
Besides, increased economic growth in Lamongan can be encouraged by investment. Investment is the main eco nomic growth factor because it can lead to high output, causing demand for inputs and increased employment op portunities [15].
Therefore, research of the influence of LocallyGenerated Revenue, Capital Expenditures, and Partially investment and simultaneously on Economic Growth in Lamongan is relevant.
Thus, the object of research is the influence of Locally Generated Revenue, capital expenditure, partial investment, and simultaneously economic growth in the Lamongan in 2010-2019. And the aim of research is to determine the influence of LocallyGenerated Revenue, capital expenditure, partial investment, and simultaneously economic growth in the Lamongan in 2010-2019.

Methods of research
This type of research is a descriptive study with a quantitative approach. The data used are secondary in the form of LocallyGenerated Revenue data, Capital Ex penditures, Investment, and Economic Growth.
The operational definition in this research, namely: 1) economic growth is an increase in output or an increase in aggregate national income in one period, for example, one year in Lamongan. Data is taken from At a Constant Price Basis Gross Domestic Regional Prod uct (GDRP) 2010-2019, which is sourced from the Central Statistics Agency of Lamongan; 2) LocallyGenerated Revenue is revenue received and sourced from Lamongan and collected based on predeter mined regulations. The data is taken from the report on the realization of the Lamongan Regional Revenue and Expenditure Budget for 2010-2019, which is sourced from the Regional Financial and Asset Management Agency of Lamongan; 3) capital expenditure is the cost incurred by Lamon gan to acquire assets and can be used for more than one year, which includes maintenance costs that can increase capacity and quality. The data is taken from the report on the realization of the Lamongan Regional Revenue, and Expenditure Budget for 2010-2019, which is sourced from the Regional Financial and Asset Management Agency of Lamongan; 4) investment is defined as a measure of foreign ownership, productive domestic assets such as factories, land, organi zations, and others. Intangible assets such as technology, marketing skills, and managerial capabilities are contained in Lamongan. The data is taken from the investment re alization reports based on Foreign Investment, Domestic Investment, and Domestic Investment nonfacilities in Lamongan in 2010-2019, which are sourced from the Investment Service and One Stop Services of Lamongan.
This study used multiple regression models using the Statistical Package for the Social Sciences (SPSS) for Windows program. Regression analysis is used to determine the dependent variable; in this case, economic growth is influenced by the independent variables consisting of (1) LocallyGenerated Revenue, (2) Capital Expen diture, and (3) Investment. With the equation formula used as follows [16]: where Y -Economic Growth; X 1 -LocallyGenerated Revenue; X 2 -Capital Expenditures; X 3 -Investment; α -Constant; β -Regression Coefficient; e -Error.  (Table 1).

Research results and discussion
Statistical calculations in multiple linear regression analysis using Statistical Package for the Social Scienc es (SPSS) 16, because this is not a research study panel data, and the data processing as follows ( Table 2).
Based on Table 2, it shows that partially the Locally Generated Revenue variable (X 1 ) has a significant negative effect on Economic Growth (Y), with a significance value of 0.001. Because the probability <0.05, the hypothesis «it is suspected that LocallyGenerated Revenue has a positive and significant effect on Economic Growth in Lamongan in 2010-2019» is rejected. Partially the Capital Expenditure variable (X 2 ) has a significant positive ef fect on Economic Growth (Y), with a significance value of 0.000. Because the probability <0.05, the hypothesis «it is suspected that Capital Expenditure has a positive and significant effect on Economic Growth in Lamongan ISSN 2664-9969 in 2010-2019» is accepted. Partially the investment vari able (X 3 ) has no significant adverse effect on Economic Growth (Y), with a significance value of 0.483. Because the probability >0.05, the hypothesis «it is suspected that investment has a positive and significant influence on Eco nomic Growth in Lamongan in 2010-2019» is rejected.  The F test is used to see the effect of the independent variable on the dependent variable simultaneously. Based on the data analysis, the calculated F value is 26.069, with a significant level of 0.000, where the significance obtained is less than 0.05. This value indicates that the Locally Generated Revenue, Capital Expenditure, and Investment together significantly impact the Economic Growth vari able in Lamongan 2010-2019.

Results of the Influence of LocallyGenerated
Revenue on Economic Growth in Lamongan 2010-2019. The high LocallyGenerated Revenue in Lamongan is ob tained from the Regional Tax, Regional Retribution, and Proceeds from the Management of Separated Regional Assets and other legitimate locallygenerated income. From the data that has been explained, it can be seen that the LocallyGenerated Revenue produced by Lamongan has been maximally extracted, but the LocallyGenerated Revenue obtained by Lamongan is used for develop ment capital expenditures in the form of buildings and offices. The construction work for eight building and office packages with a total budget of IDR 3,095 bil lion, on average, has been done between 65 percent and 70 percent [17]. The construction absorbs many funds from the LocallyGenerated Revenue Lamongan. Still, the public's benefits can't be perceived to increase the Economic Growth contained in Lamongan.
This research is by research conducted by [18], Locally Generated Revenue has a significant negative effect on eco nomic growth. This is because the potential of East Java Province is not fully maximized so that LocallyGenerated Revenue has not been able to encourage economic growth. However, this research is not in line with the study con ducted by [13]. LocallyGenerated Revenue has a positive and significant effect on economic growth (Gross Domestic Regional Product (GDRP)), which means that the higher the LocallyGenerated Revenue generated by the City gov ernment will increase the level economic growth of an area.

Results Effect of Capital Expenditure on Eco nomic Growth in Lamongan
Year 2010-2019. The Capital Expenditure of Lamongan has increased every year; this can be seen in the Lamongan Regional Revenue and Ex penditure Budget realization data. The revenue of Lamon gan is maximized so that infrastructure development will increase. The infrastructure built is in the form of district roads and village roads, so that it makes economic growth Lamongan continually growing.
This research follows research conducted by [10]. Capital Expenditure has a positive effect on economic growth in Districts/Cities on the Island of Sumatra. However, this study is not in line with [13]; capital expenditure does not affect economic growth.

Results Effect against Economic Growth Investing in Lamongan
Year 2010-2019. Investment does not affect the economic growth in Lamongan. This is because the investment climate condition is not yet conducive, such as information on investment opportunities that have not been widely promoted. Investors do not have information; investment prospects are not promising; capital accumula tion is still low due to extreme consumption.
This research is under the research conducted by [19]; investment does not affect economic growth. However, this study is not in line with [14]; investment has a significant positive effect on economic growth. Based on the results of the discussion and conclusions drawn in this study, some suggestions can be made as follows:

Conclusions
1. LocallyGenerated Revenue in Lamongan should be directed at matters that directly impact the people of Lamongan and be used for the construction and re pair of community service facilities, such as irrigation channels, village bridges, and roads.
2. The Lamongan Government must carry out develop ment to remote villages so that infrastructure development can be evenly distributed, to increase economic activity in Lamongan.
3. The Lamongan Government must encourage investment in Lamongan by improving public services, increasing a healthy business climate, and ensuring legal certainty so that investment can run optimally and increase the economic growth of Lamongan.