I J A B E R, Vol. 14, No. 11, (2016): 7863-7880
IMPACT OF CAPITAL INVESTMENTS AND CASH
DIVIDEND POLICY ON REGIONAL DEVELOPMENT
BANK (BPD) PT. BANK SUMUT TO THE DISTRICT OWN
SOURCE REVENUE AND ECONOMIC GROWTH
Iskandar Muda1, Abykusno Dharsuky2 , Isfenti Sadalia3 and
Hasan Sakti Siregar4
Abstract: This study aims to examine the impact of capital investment and cash dividends
policy from the operations of the Regional Development Bank (PT. Bank Sumut) of the
contribution to district own resource and economic growth is the result of capital investment
is done as a form of application dividend policy and agency theory. The study design was
descriptive quantitative. The study population is the District Municipality in the North
Sumatra capital with share holder equity by the number of research samples are 25 District
Municipality of the 2010-2014 period in which the sampling technique is done by purposive
sampling method. Analysis of the data used to test the hypothesis is descriptive analysis, and
pooling the data with the help of AMOS program. The results of this study concluded (1)
Shares Holder Equity is significant effect on own resources revenue. (2) The cash dividend
variableno significant effect on the own resources revenue (3) Variable Shareholder Equity no
significant effect on economic growth. (4) Cash Dividend Variableis not significant effect to
the economic growth. (5) Local Own Revenue Variable significant effect on economic growth
and the influence of Sahreholder Equity (70.3%) and cash dividend (1.4%) to the Own Resource
Revenue and the magnitude of the effect on the economic growth of shareholder equity variable
(41%) and Cash Dividends (9.7%).
Keywords: Capital Investment,Cash Dividends, Own Source Revenue, Agency Theory and
Dividend Policy.
1. INTRODUCTION
Regional Development Bank became the center of rotation of the economy the
government, especially local government. If the economy in each area well, then
this will have an impact that is very good for the national economy. From the
capital side nationally based research Indarwati and Anan (2014), especially in
terms of capital structure discovered that the ratio of Equity to Asset Ratio (EAR)
1,2,3,4
Faculty Economics and Business – University of Sumatera Utara (USU), Jl. Prof. TM Hanafiah No.12
USU Campus, Medan. North Sumatera, Indonesia
* Correspondence Author. E-mail: iskandar1@usu.ac.id
,7864 � Iskandar Muda, Abykusno Dharsuky, Isfenti Sadalia and Hasan Sakti Siregar
regional development banks (BPD) gained an average of 11.83% with data is as
low as 6.00 % ie the Bank Lampung in 2008 and the highest 22.23% that the BPD
Southeast Sulawesi in 2008. While the standard deviation of 3.05 EAR variable
looks smaller than the average value. In this case the deviation of the data can be
said to be good, because the value of the standard deviation is smaller than the
average value. Research results memnyimpulkan that the EAR as an indicator of
the availability of capital, the higher the ratio value EAR more awake operational
continuity so as to protect the investors of bankrupt because of their role owner
that is able to encourage the management improve the performance efficiency
that will impact on company profits obtained. Research carried out by the Chobeh
et. al. (2014) concludes that the government’s stake either a majority stake or
institutional shares give effect to the dividend policy.
Badruddin (2004) concluded budget increase revenues in the budget can be
done via the PAD acceptance of deposits, especially the Bank’s net profit Local
Government. Results of research Valuation and Research Specialists (VRS). (2016)
by surveying its dividend policy on 70 companies in the United Kingdom concluded
that 83% Dividend Policy Model Lintner applied. There is a positive correlation
between the size of the variable dividend earnings in a period and there is a negative
correlation between the dividend this year with the previous year. Wolmarans
(2003) concluded that the model was not good enough Lintner applied when
analyzing dividend policy on a small sample. Dividend policy is not always
effectively applied even though the company’s profit increased in that time period.
Al-Malkawi et. al. (2010) found that the dividend policy is consistent with the
hypothesis Modigliany and Miller (M and M Theory) where in a perfectly
competitive market dividend policy is not necessarily related to taxes, transaction
costs, information asymmetry and agency problems.
Research Huang et. al. (2009) found that the dividend policy is influenced by
institutional setups, conventional factors, especially their profitability and the
capability to pay in China. DeAngelo et. al. (2006) states that that the new company
listings are always bereforia and do the announcements and promises big dividends
for those who want to make their capital investments. Caelers (2010), which
examines the relationship between dividend policy agency conflicts. The results
showed that the Dividend Payout influenced by government policies, company
size, percentage and composition of the stock. The greater these variables, the
greater the impact on dividends. Research Aivazian (2014) concluded that dividend
decisions respond to informational asymmetries, agency costs, and the institutional
and contracting environment.
In general, people connecting the autonomous region containing
deconcentration and decentralization to the regions, is in order to improve national
development area. Involves the participation of the people’s aspirations and the
, Impact of Capital Investments and Cash Dividend Policy on Regional... � 7865
area of how development is implemented based on economic and political
perception. In general, venture capital investment is an attempt to have a company
that is new or already underway, with the paid in capital. The capital injection is
also carried out by the City Government in order to increase cash resources area.
When Act 40 Year 2007 regarding Limited Liability examined carefully, it can be
said there is something missing in this unadang law, namely the notion of equity
shares or can not be found penjabarannya implicitly (Abdullah, 2010). In this law
is found only the authorized capital stock consists of the nominal value of shares.
Article 24 of Law No. 40 Year 2007 on Limited Liability Company. Regional-Owned
Enterprises (enterprises) typically also spread across various economic sectors
important to the region. Bank is one of them, which is a business area on the
banking sector in general.
The role of local government be it provincial or regency/city in this business
is relatively very large, at least with control of the majority of shareholders.
Existence of these enterprises are also included as a consequence of where things
that are important or branches of production that are important and dominate the
life of many dikusai by the State in this case the provincial or regency/city. Limited
Liability Company (owned by the county or local government) that is preferred is
to benefit by trying the field to encourage private sector development area.
Practice occurs mostly where the company owned by the local government is
no different to a private company, but the dominance of government elements
provincial or district/city as a shareholder in the company. In carrying out this
capital, which must first be aware of is the funds available to be used in the best
possible to be able to generate enhanced customer service and maximum welfare
society in the interests of the City. Implementation of regional autonomy has
brought a new climate in all districts and cities in Indonesia. The area was given
more responsibility for managing all existing local resources each their region.
According Kuncoro (2004) basically all areas of business to undertake capital
investment area, in an effort to Own Source Revenue (PAD) is open to all areas of
the economy and not just banking. However, this should still pay attention to the
benefits of this capital for the local community.
In conducting its investment in Bank city government would have to follow
the terms of common equity, which is stipulated in Bank Indonesia Regulation
No. 5/10/PBI/2003 where equity is the investment of bank funds in the form of
shares in a company engaged in finance, including placement in convertible bonds
with stock options or certain kinds of transactions which the Bank holds or will
hold shares in a company engaged in finance. The results of this investment must
