diff --git a/src/compiler/tsc.ts b/src/compiler/tsc.ts
index e25ae37e21fa9..14806885296a0 100644
--- a/src/compiler/tsc.ts
+++ b/src/compiler/tsc.ts
@@ -385,7 +385,8 @@ namespace ts {
                 sys.exit(ExitStatus.DiagnosticsPresent_OutputsSkipped);
                 return;
             }
-            const configParseResult = parseJsonConfigFileContent(configObject, sys, getNormalizedAbsolutePath(getDirectoryPath(configFileName), sys.getCurrentDirectory()), commandLine.options, configFileName);
+            const cwd = sys.getCurrentDirectory();
+            const configParseResult = parseJsonConfigFileContent(configObject, sys, getNormalizedAbsolutePath(getDirectoryPath(configFileName), cwd), commandLine.options, getNormalizedAbsolutePath(configFileName, cwd));
             if (configParseResult.errors.length > 0) {
                 reportDiagnostics(configParseResult.errors, /* compilerHost */ undefined);
                 sys.exit(ExitStatus.DiagnosticsPresent_OutputsSkipped);
diff --git a/tests/baselines/reference/umdGlobalMerge.errors.txt b/tests/baselines/reference/umdGlobalMerge.errors.txt
new file mode 100644
index 0000000000000..eb4a116ef0981
--- /dev/null
+++ b/tests/baselines/reference/umdGlobalMerge.errors.txt
@@ -0,0 +1,20 @@
+tests/cases/compiler/b.d.ts(2,20): error TS2305: Module '"tests/cases/compiler/a".ns' has no exported member 'IFoo'.
+
+
+==== tests/cases/compiler/a.d.ts (0 errors) ====
+    export = ns;
+    
+    export as namespace ns;
+    
+    declare namespace ns {
+      export var x: number;
+      export interface IFoo { }
+    }
+    
+==== tests/cases/compiler/b.d.ts (1 errors) ====
+    declare namespace ns.something {
+      export var p: ns.IFoo;
+                       ~~~~
+!!! error TS2305: Module '"tests/cases/compiler/a".ns' has no exported member 'IFoo'.
+    }
+    
\ No newline at end of file
diff --git a/tests/cases/compiler/umdGlobalMerge.ts b/tests/cases/compiler/umdGlobalMerge.ts
new file mode 100644
index 0000000000000..1f42e2fda7145
--- /dev/null
+++ b/tests/cases/compiler/umdGlobalMerge.ts
@@ -0,0 +1,14 @@
+// @filename: a.d.ts
+export = ns;
+
+export as namespace ns;
+
+declare namespace ns {
+  export var x: number;
+  export interface IFoo { }
+}
+
+// @filename: b.d.ts
+declare namespace ns.something {
+  export var p: ns.IFoo;
+}