Abstract:
This research aims to give empirical evidence and examines the effect of pendapatan asli daerah (PAD), dana alokasi umum / general budget (DAU) on capital expenditure (belanja modal) by considering pooled data. The research objects are Regency / Municipality of East Java. The data used in this research taken from 2005-2006 and Regency / Munificipality Governments recorded in table of General Budget Calucalation (perhitungan Dana Alokasi Umum) issued by Bapekki Departemen Keuangan.
The analysis found that PAD and DAU have effect on capital expenditure (belanja modal). It means local government was able to to predict capital expenditure based on PAD and DAU
