Mergers and Acquisitions in Vietnam's Emerging Market Economy: 1990-2009
Quan Hoang Vuong
Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management; FPT/FSB; Vuong & Associates
Tri Dung Tran
Thi Chau Ha Nguyen
Dan Houtte, Vuong & Partners
November 10, 2009
WP-CEB No. 09/045
This paper is the first major and thorough study on the M&A activities in Vietnam’s emerging market economy, covering almost entirely the M&A history after the launch of Doi Moi. The surge in these activities since mid-2000s by no means incidentally coincides with the jump in FDI and FPI inflows into the nation.
M&A industry in Vietnam has its socio-cultural traits that could help explain economic happenings, with anomalies and transitional characteristics, far better than even the most complete set of empirical data. Proceeds from sales of existing assets and firms have mainly flowed into the highly speculative industries of securities, banking, non-bank financials, portfolio investments and real estates. The impacts of M&A on Vietnam’s long-term prosperity are, thus, highly questionable. An observable high degree of volatility in the M&A processes would likely blow out the high ex ante expectations by many speculators, when ex post realizations finally arrive.
The effect of the past M&A evolution in Vietnam has been indecisively positive or negative, with significant presence of rentseeking and likelihood of causing destructive entrepreneurship. From a socioeconomic and cultural view, the degree of positive impacts it may result in for domestic entrepreneurship will perhaps be the single most important indicator.
Number of Pages in PDF File: 44
Keywords: Capital Market, Emerging Market, Entrepreneurship, Mergers and Acquisitions, Transition Economy, Vietnam
JEL Classification: G34, G38, O16
Date posted: November 10, 2009