Vector autoregressive model: to analyze the influence of the agriculture, mining and quarrying sectors on local revenues

This study examines the influence of the agricultural, mining, and quarrying sectors on local revenues in special autonomous provinces in Indonesia. This study uses time-series data from 1990 to 2021 and is analyzed using the Vector Auto-Regressive (VAR) Model. The results indicate that the agricultural sector did not influence local local revenues. Agricultural land in special autonomous provinces in Indonesia is highly extensive but cannot be managed efficiently. Likewise, the mining and quarrying sector did not affect local revenues. The mining and quarrying sector has high production but is income for the central government and not for regional governments. Apart from that, the agricultural sector influenced the mining and quarrying sector. Likewise, the mining and quarrying sector also influenced the agricultural sector in the special autonomous provinces in Indonesia. However, local revenues are only influenced by elements of local revenues itself, such as regional taxes, regional levies, results from the management of separated regional assets, and other legitimate local revenues. This study has important implications for the implementation of the Aceh Government Law No. 11 of 2006 concerning the distribution of natural resource revenues in Indonesia. Further researchers can then focus on local revenues from Gross Regional Domestic Product (GRDP) as a reflection of local revenues in special autonomous provinces in Indonesia.