The Effect of Ecological Fiscal Transfers on Regional Environmental Performance: Moderatd by Economic Development Level

Nadia Triana Safitri; Novi Dirgantari; Sri Wahyuni; Edi Joko Setyadi

doi:10.24843/EJA.2025.v35.i08.p20

Authors

Nadia Triana Safitri Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto, Indonesia
Novi Dirgantari Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto, Indonesia
Sri Wahyuni Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto, Indonesia
Edi Joko Setyadi Faculty of Economics and Business, Universitas Muhammadiyah Purwokerto, Indonesia

DOI:

https://doi.org/10.24843/EJA.2025.v35.i08.p20

Keywords:

Ecological Fiscal Transfers, Environmental Performance, Economic Development

Abstract

This study aims to analyze the influence of Ecological Fiscal Transfers (EFT) and the level of economic development on regional environmental performance in Indonesia. The data were analyzed using multiple linear regression and moderation analysis to examine whether EFT and economic development affect environmental performance, and whether there is an interaction effect between them. The findings indicate that neither EFT nor economic development has a statistically significant effect on environmental performance. Likewise, there is no moderating effect of economic development on the relationship between EFT and environmental outcomes. These results suggest that although EFT is theoretically a promising policy for promoting sustainable development, its implementation at the local level still faces challenges related to coordination, budget effectiveness, and institutional capacity. This study recommends integrating cross-agency coordination and performance-based evaluation in the design of more effective EFT policies.

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