DOES INSTITUTIONAL QUALITY IMPACT ON FOREIGN DIRECT INVESTMENT OF ECONOMIC GROWTH IN INDIA- USING STRUCTURAL EQUATION MODELING.

Purpose: This empirical investigation based on the current stage of economic development indicates that FDI has important impact on the country of destination's stable, high-quality and healthy economic growth. Any nation that is involved in the process of economic globalization is therefore trying to develop a competitive business environment in the country to draw further foreign investments. Design/Methodology/Approach: the main objective of this study is based on Institutional quality or Evidence and I selected 5 factors Institutional Metrics like Control of Corruption, Government Effectiveness, Political Stability, Regulatory Quality, Rule of Law from DPIIT website (Secondary Data) for the period 2018-2023. We are Using stalactitical tools like Unit root Test, ARDL Approach & SEM. Originality/Value: This study applies Least Squares regression (OLS): The study examined the impact of institutional factors influence on the FDI flows. The study has considered the ordinary least square method to know the impact of institutional factors (independent variables) on FDI flows (dependent variable). Findings: The study found with the help of ARDL model that the Institutional indicators had are having the positive coefficient value and stated that Institutional Metrics of corruption and Govt. effectiveness are institution indicators which shown short run association with FDI flows, The study examined that Political stability f-statistic value is falling above the upper peasant table (i.e., 7.4578 > 4.16) which states political stability has a long run association with FDI flows, Institutional Indicators such as Rule of law, Regulatory Quality and Voice & accountability had a long run association with FDI flows. Keywords: FDI, Institutional Metrics, Economy Growth, SEM Model.