The study investigates the impact of institutional quality on foreign direct investment (FDI) in Nigeria for the period 1986 to 2019. This study tends to ascertain if there is a relationship between institutions and FDI and if so, is it a short run or long relationship. The study employed the ARDL Co-integrating Bound test to show if the variables are cointegrated while the ARDL estimation technique was used to ascertain its short run and long run relationship. the findings show that political instability, corruption index, terrorism index negatively and significantly affect the inflow of FDI in both the short run and long run. While voice and accountability, rule of law, government effectiveness, gross fixed capital formation and trade openness positively and significantly impact on FDI both in the short run and long run. The study recommends that government should maintain high quality institutions in the country at all costs for effective inflows of FDI and the growth of the economy.

Keywords: Institutions, FDI, ARDL, Nigeria