Foreign Direct Investment On Economic Evidence In India- An Institutional Quality Approach.

Abstract

Purpose: This empirical study at the present phase of economic advancement suggests that foreign direct investment (FDI) significantly influences the sustained, high-caliber, and robust economic development of the host country. Every country engaged in the economic globalization trajectory is thus striving to foster a competitive business atmosphere domestically, aiming to attract additional foreign investments.
Design/Methodology/Approach: The primary focus of this research centers around Institutional quality or Evidence, with a particular emphasis on 10 selected factors within Institutional Metrics. Some of these include anti-corruption efforts, efficient government, stable politics, high-quality regulations, legal protections, and citizen participation and accountability.
Civil liberties, Women in parliament, Corruption perceptions, Political rights) from DPIIT website (Secondary Data) for the period 2022-2023. Static analysis methods such as the Unit Root Test, the ARDL Approach, and the OLS Model are being used.
Originality/Value: The impact of institutional factors on foreign direct investment (FDI) flows is investigated in this study using the Least Squares regression (OLS) method. Here, FDI flows are the dependent variable, and the ordinary least square method is utilized to evaluate the effect of institutional elements on these streams.
Findings: According to the study's use of the ARDL model, some institutional indicators have positive coefficient values; among them, measures of government efficiency and corruption stand out as indicators that have shown a short-term correlation with foreign direct investment (FDI). The investigation discovered that institutional markers like law and order, administrative quality, and voice and responsibility had a long run relationship with FDI streams, and that political stability had an f-