Özet:

Domestic and foreign savings are the basis of economic growth and development in developed or developing countries. Since the 1980s, with the increasing capital mobility, many studies have been carried out in this field. Recently, the Feldstein-Horioka (FH) puzzle, which presupposes the existence of a strong correlation between domestic savings and investment, has been used frequently to discuss capital mobility. The main objective of this study is to assess the validity of the Feldstein-Horioka puzzle for the G20 countries between 1995 and 2020. The variables of the ratio of domestic savings and investments to gross domestic product used in the study were obtained from the World Bank's Development Indicators database. In this study, innovative data analytical procedures were used, taking into account the methodological problems of the existing literature. In this context, the current research considers panel data's cross-sectional dependence and heterogeneity. The FH panel coefficients obtained from the Extended Mean Group (AMG) estimator and the Common Correlation Mean Group of Effects (CCEMG) estimators are 0,261 and 0,301, respectively. The findings demonstrate that the FH puzzle is invalid in G20 countries. This study presents essential policy and practice implications for future studies based on the savings and investment relationships.