Industry Linkages, Uncertainty, and Cross-border Mergers

January 2, 2026, Paper: "Multinational firms are strategically changing their organizations in response to es calating geopolitical risks. This paper investigates the role of mergers and acquisitions (M&A) in restructuring firm organizations in a time of uncertainty. Our initial step quantifies the relative distance between acquiring and target firms within a production value chain. Regression analysis shows that heightened economic policy uncertainty correlates with a greater likelihood of cross-border acquisitions occurring at more dis tant production stages. We present a conceptual model grounded in the hypothesis that f irms integrate farther along global value chains during times of uncertainty. The im plications of our model align consistently with the empirical findings, highlighting the trade-off between synergies and exposure to unexpected shocks in vertical integration decisions along the global production network."