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Cross-Border Spillovers: How U.S. Monetary Conditions Affect M&As Around the World

Author

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  • Bergant, Katharina
  • Mishra, Prachi
  • Rajan, Raghuram
  • Pinzon-Puerto, Freddy

Abstract

We study how U.S. monetary policy shocks transmit to cross-border merger and acquisition (M&A) activity. Using country- and firm-level data, tighter U.S. policy is shown to reduce both the value and the number of cross-border deals. The effects are especially pronounced for acquirer firms with larger foreign-currency liabilities, consistent with a net worth channel. Reflecting agency motives for acquisitions, deals announced under more accommodative U.S. conditions underperform ex post, indicating potential capital misallocation.

Suggested Citation

  • Bergant, Katharina & Mishra, Prachi & Rajan, Raghuram & Pinzon-Puerto, Freddy, 2026. "Cross-Border Spillovers: How U.S. Monetary Conditions Affect M&As Around the World," CEPR Discussion Papers 21198, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:21198
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    File URL: https://cepr.org/publications/DP21198
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    Keywords

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    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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