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

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

No 21198, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Cross-border; flows (search for similar items in EconPapers)
JEL-codes: F63 F65 G34 (search for similar items in EconPapers)
Date: 2026-02
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