M&A Market in Vietnam's Transition Economy
Journal of Economic Policy and Research, Vol. 5, No. 1, pp. 1-54, October 2009 - March 2010
56 Pages Posted: 15 May 2010 Last revised: 22 Aug 2010
Date Written: October 1, 2009
This paper is the first major and thorough study on the Merger & Acquisition (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 the 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 impact of M&A on Vietnam’s long-term prosperity is 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 rent-seeking and likelihood of causing destructive entrepreneurship. From a socio-economic and cultural view, the degree of positive impacts may result in domestic entrepreneurship which will perhaps be the single most important indicator.
Keywords: Capital Market, Emerging Market, Entrepreneurship, Mergers and Acquisitions, Transition Economy, Vietnam
JEL Classification: G34, G38, O16
Suggested Citation: Suggested Citation