DETERMINATION FACTORS OF FINANCIAL DECISION AND ITS IMPACT ON ECONOMIC GROWTH IN NORTH SUMATERA PROVINCE

The economic growth of districts/cities in North Sumatra is relatively more lower than other regions. This research found that financial decisions have a great influence on economic growth. Local government budget determines economic growth. While Local government budget allocates focus for routine expenditure rather than development expenditure, so economic growth going to decrease. The study also found that the economic environment, legal environment, political environment and social environment determine financial decisions in a local government. Besides that the results of the study conclude the political environment influences economic growth while the economic environment, legal and social environment does not affect economic growth.