HUBUNGAN ANTARA HASIL DENGAN PERBELANJAAN: BUKTI EMPIRIKAL KERAJAAN PERSEKUTUAN DAN KERAJAAN NEGERI DI MALAYSIA

The main objective of this study is to examine the direction of causality relationship between two fiscal variables such as government spending and tax revenue. According to prior studies, there are several hypotheses to explain the relationship between revenue and spending, such as (1) spend-revenue hypothesis, (2) revenue-spend hypothesis and (3) bi-directional causality hypothesis which support the fiscal synchronization hypothesis. To test the validity of these hypotheses, this study utilised several time series econometric techniques such as cointegration test, Granger causality test, variance decomposition and impulse response function. Based on empirical evidence, we can conclude the existence of spend-revenue hypothesis for the federal government. This means that growth in government spending causes the growth in revenue. Meanwhile, for the state government, the empirical finding showed the bi-directional causality between government spending and revenue which support the fiscal synchronization hypothesis. In addition, the growth in the GDP also causes growth in federal dan state government spending, which supports the Wagner theorem.