icpp-logo
icpp-logo
Home
ResearchResearch Project
Cross-border Spillovers: How US Financial Conditions affect M&As Around the World
Macro & Public Finance
19 February, 2026

Cross-border Spillovers: How US Financial Conditions affect M&As Around the World

View Article
Dr. Prachi Mishra
Dr. Prachi Mishra
Head and Director, Co-lead, Macro & Public Finance, ICPP, Professor of Economics, Ashoka University
Raghuram Rajan
Freddy Pinzon-Puerto
Katharina Bergant

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.

icpp-logo
As the policy wing of Ashoka University, ICPP stands at the intersection of rigour and relevance, building pathways for knowledge to converge, travel, inform, and transform.

Subscribe to our newsletter

©2024-25 Isaac Centre for Public Policy