Analysis the Relationship between Gross Regional Domestic Product and Original Local Government Revenue in Cities in Central Java Province

Abstract

This study aims to analyze the relationship between Gross Regional Domestic Product and Original Local Government Revenue in six cities in Central Java Province, namely Semarang, Surakarta, Salatiga, Magelang, Pekalongan, and Tegal. The approach used is a quantitative method with Pearson correlation analysis to determine the direction and strength of the relationship between the two variables. The results of the normality test showed that the Original Local Government Revenue variable was normally distributed, while the Gross Regional Domestic Product was not. The results of the correlation test showed a coefficient value of 0.188 with a significance of 0.721, which means that the relationship between Gross Regional Domestic Product and Original Local Government Revenue is positive but very weak and not statistically significant. These findings indicate that the increase in Gross Regional Domestic Product has not fully contributed to the increase in Original Local Government Revenue. Therefore, local government efforts are needed to optimize the potential of the local economy and strengthen fiscal policies so that economic growth can have direct implications for increasing regional fiscal independence.