CASH MANAGEMENT IN INDONESIAN LOCAL GOVERNMENTS: A STUDY ON THE RELATIONSHIP BETWEEN GOVERNMENT PROFILE AND CASH HOLDING

  • Heru Fahlevi Universitas Syiah Kuala

Abstract

This study aims to examine the relationship between local government size, budget revision, beginning cash balance, current budget absorption and regional fiscal capacity and cash holding in local governments of Aceh Province - Indonesia. The sample in this study is 23 districts  cities in Aceh Province and data is collected from financial reports of the studied districts/cities between 2011 and 2015. Thus, the total observations in this study are 115 districts-years. Pearson Correlation method is employed to analyze the data. This study demonstrates that the beginning cash balance, current budget absorption, budget revision, local government size have a positive association with cash holding, while the fiscal capacity has a negative relationship with cash holding in the studied districts and cities within Aceh Province – Indonesia. Based on this finding, a policy on cash management and cash holding can be proposed to ensure the optimization of cash holding in local government and avoid too much idle money.

Published
2018-11-13
How to Cite
Fahlevi, H. (2018). CASH MANAGEMENT IN INDONESIAN LOCAL GOVERNMENTS: A STUDY ON THE RELATIONSHIP BETWEEN GOVERNMENT PROFILE AND CASH HOLDING. Simposium Nasional Keuangan Negara, 1(1), 1232-1246. Retrieved from https://jurnal.bppk.kemenkeu.go.id/snkn/article/view/254