The Effect of Balancing Funds and Capital Expenditure on The Financial Performance of City Governments in East Java
DOI:
10.47353/ecbis.v4i4.335Published:
2026-05-03Downloads
Abstract
This study aims to examine the effect of balancing funds and capital expenditure on financial performance. A quantitative approach with an associative research design was employed. The population consists of city governments in East Java Province, with a sample of seven cities selected using purposive sampling, resulting in 21 observations during the 2022–2024 period. Data were collected through documentation and analyzed using the SEM-PLS method. The results show that both balancing funds and capital expenditure do not have a significant effect on financial performance. In terms of direction, balancing funds have a negative relationship, while capital expenditure has a positive relationship, although both are statistically insignificant. The coefficient of determination (R² = 0.182) indicates that these variables explain only 18.2% of financial performance, while the remaining 81.8% is influenced by other factors outside the model.
Keywords:
Balanced Funds Capital Expenditure Financial PerformanceReferences
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