significant and positive effect towards Local Revenue. This indicates that the respective districtcity in South Sumatra took a positive policy in the
development potential and attractiveness of the area by doing physical development. Gross Regional Domestic Product Also has a positive and
significant effect to the Local Revenue. This happens because the movement of GRDP is dominated by primary and tertiary sectors. While,
North Sumatera Province is rich in Natural Resource.
Table 2.1
Previous Studies No
Author Variables
Method Results
1 Tobing,
2015 Local Revenue Y
Total Population X
1
Gov Expenditure X
2
GRDP X
3
Panel Data with Multiple Linear Regression
Analysis Total Population is not significant to
Local Revenue Government Expenditure is positive
and significant to Local Revenue GRDP is positive and significant to
Local Revenue 2
Datu K, 2012
Local Revenue Y Gov Expenditure X
1
GRDP X
2
Analysis Regression Model with 2 SLS
Gov Expenditure was significant and positive effect to Local Revenue
followed by GRDP and its effect positive and significant directly
towards Local Revenue While, GRDP also was effect significant and positive
towards Local Revenue.
3 Aryanti
and Indarti,
tt Local Revenue Y
GRDP X
1
Inflation X
2
Analisis Regresi Linear Berganda
GRDP was effected the increasing of Local Revenue positively.
Inflation was not effect to the increasing of Local Revenue.
4 Atmaja,
2011 Local Revenue Y
Local Expenditure X
1
Total Population X
2
GRDP X
3
Ordinary Least Square OLS
For all variables were effected towards Local Revenue.
As individually, Total Population was having a great effect to Local Revenue.
5 Kusrini,
2015 Local Revenue Y
GRDP X
1
Direct Expenditure of Local Government X
2
Total Population X
3
Panel Data Model GRDP has effect significantly to the
increasing Local Revenue. The growth value of Direct
Expenditure of Local Government was affected significantly.
Total Population was not affecting to Local Revenue.
C. Framework
The Tests associated with the development of macro variables, such Total Population, Government Spending and Gross Regional Domestic Product GRDP
that have a functional relationship with the Local Revenue PAD. In this study, the framework of reasoning as follows:
FIGURE 2.1
Scheme of Framework
D. Hypothesis
The hypothesis to be tested on the macro variables in this study are:
1. Presumably
the positive influence between Total Population
towards Local Revenue PAD.
2. Presumably the positive influence between Government Spending towards
Local Revenue PAD. 3.
Presumably the positive influence between Gross Regional Domestic Product GRDP towards Local Revenue PAD.
Total Population
Gross Regional Domestic Product GRDP
Local Revenue PAD
+ +
+
Government Spending
32
CHAPTER THREE RESEARCH METHODOLOGY
A. Object Subject of Research
This study is aimed at districts cities in Riau Province. Pekanbaru municipal elections as the study area due to facilitate the collection of data, in addition
Pekanbaru is the capital of Riau province.
B. Types and Sources of Data
The data used in this study are primary and secondary quantitative method which is the time series data from 2010-2014. About the Local Revenue PAD,
Total Population, Government Spending and Gross Regional Domestic Product GRDP is obtained from the Office of the Department of Revenue, the Central
Statistics Agency BPS Riau, literature-literature books and reports related to this writing.
C.
Data Collecting Technique
Data collecting was done in this study by way author proposes permit research to agencies associated with this author in a study area, after being given
permission research and obtain the data required, and then the data will be processed and used as materials analysis to prove the hypothesis that has been put
forward.
D. The Variables Operational Definition of Research
In this study consisted of the dependent variable [Y] is Local Revenue PAD of Riau Province, Independent Variables [X
1
] is Total Population, [X
2
] Government Spending, and [X
3
] Gross Regional Domestic Product GRDP of Riau Province.
Local Revenue PAD is a source of local revenue derived from the results of local taxes, levies result, the results of companies belonging to the region and
other areas of wealth management results were separated and others Local Revenue PAD legitimate in Riau Province. Unit in thousand rupiah, data is
taken from the Central Bureau of Statistics Riau Province 2010-2014. Total Population is the number of people living in the province of Riau. Data
is taken from the Central Statistics Agency of Riau Province 2010-2014. Government Spending is the expenditure including the government sector and
purchases of goods and services used for the payment of subsidies which implements the functions of government. Government expenditure data is taken
from the Central Statistics Agency of Riau Province 2010-2014. Gross Regional Domestic Product GRDP is the total value of production of
goods and services produced in the region regional within a certain specified time one year in the province of Riau. Data is taken from the Central Statistics
Agency of Riau Province 2010-2014.
E. Analysis Method
Data analysis technique used quantitative approach which quantitatively explains the object of study is based on facts and data. Then, analyze descriptively
to answer the problem of research. This approach is expected to explain the condition of the object under study to look at the Total Population, Government
Spending in the form of direct and indirect spending and Gross Regional Domestic Product at constant prices of the Local Revenue in districtscities in
Riau Province. This study uses panel data. Panel data regression is used to answer the purpose
of this study is to determine whether the number of Total Populations, Government Spending and Gross Regional Domestic Product affect Local
Revenue in districtscities in Riau Province. Panel data is a combination of time series data time series and data cross cross section. There are several
advantages of using panel data in economic research. According to Gujarati
2010 in Tobing, 2015, the advantage of using panel data is as follows:
1. Data Panel is able to accommodate the level of heterogeneity of the
variables that are not included in the model. 2.
Data Panel able to indicated and measured the effect is the same and cannot be obtained with a simple cross section pure or pure time series.
3. Data Panel was able to reduce co linearity between variables.
4. Data Panel can test and build more complex behavioral models.
5. Data Panel can minimize bias generated by individual regression because
more data units.
