What question did this study set out to answer?

The study aims to explore how multinational firms adjust their organizational boundaries through cross-border mergers and acquisitions during times of economic uncertainty.

May 16, 2026

Organizing Production across Borders in a Time of Uncertainty

Key Points

The study aims to explore how multinational firms adjust their organizational boundaries through cross-border mergers and acquisitions during times of economic uncertainty.
Analyzed data from cross-border M&A transactions and US input-output tables.
Utilized regression estimates to assess the relationship between disruption risk and integration patterns.
Examined how economic policy uncertainty affects firms' vertical integration decisions.
Increased economic policy uncertainty is linked to a significant rise in vertical integration among firms.
Firms are more likely to acquire targets at distant stages of the value chain during times of heightened disruption risk.
Regression analysis shows strong evidence of the association between uncertainty and integration patterns.

Abstract

Intensifying geopolitical turmoil has revealed the fragility of international production networks. This paper demonstrates how multinational firms are redefining their organizational boundaries by examining cross-border mergers and acquisitions (M&A’s) as a lever for restructuring global production networks in turbulent times. Combining comprehensive data from cross-border M&A transactions and US input-output tables, the paper provides robust evidence that rising economic policy uncertainty compels firms to deepen vertical integration by acquiring targets situated at more distant stages of the value chain. Regression estimates suggest that heightened disruption risk is significantly associated with multinational firm integration patterns.

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