Empirical Evidence on Relationships between Ex Ante Innovation Pursuit and Post-M&A Performance in the Vietnamese M&A Industry, 2005-2012

ULB-CEB Working Paper Series, No. 13/009

18 Pages Posted: 30 Jan 2013 Last revised: 29 Jul 2019

See all articles by Quan Hoang Vuong

Quan Hoang Vuong

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management; Phenikaa University

Nancy K. Napier

Boise State University - College of Business & Economics

Donaldine Samson

Stamford International University

Hong Kong Nguyen

Ritsumeikan Asia Pacific University, Students; Toan Viet Info Service

Date Written: January 28, 2013

Abstract

This research aims to communicate new results of empirical investigations to learn about the relationship between determination of controlling an acquired firm’s capital, assets and brand versus its capability of innovation and ex post performance of the rising Vietnamese M&A industry in the 2005-2012 period. The analysis employs a categorical data sample, consisting of 212 M&A cases reported by various information sources, and performs a number of logistic regressions with significant results as follows. Firstly, the overall relationship between pre-M&A pursuit’s determination on acquiring resources and performance of the post-M&A performance is found significant. There exist profound effects of a ‘size matters’ strategy in M&A ex post performance. When there is an overwhelming ‘resources acquiring’ strategy, the innovation factor’s explanatory power becomes negligible. Secondly, for negative performance of post-M&A operations, the emphasis on both capital base and asset size, and the brand value at the time of the M&A pursuit is the major explanation in the post-M&A period. So does the absence of innovation as a goal in the pre-M&A period. These two insights together are useful in careful M&A planning. Lastly, expensive pre-M&A expenditures tend to adversely affect the post-M&A performance. As a general conclusion, this study shows that innovation can be an important factor to pursue in M&A transitions, together with the need to emphasize and find capable and willing human capital, rather than a capital base (equity or debt) and existing values of the acquired brands.

Keywords: Mergers and Acquisitions, Innovation, Firm Performance, Economic Transition, Human Capital, Financial Markets, Vietnam

JEL Classification: L25, O10, O30, P31, P34

Suggested Citation

Vuong, Quan Hoang and Napier, Nancy K. and Samson, Donaldine and Nguyen, Hong Kong, Empirical Evidence on Relationships between Ex Ante Innovation Pursuit and Post-M&A Performance in the Vietnamese M&A Industry, 2005-2012 (January 28, 2013). ULB-CEB Working Paper Series, No. 13/009, Available at SSRN: https://ssrn.com/abstract=2208579 or http://dx.doi.org/10.2139/ssrn.2208579

Quan Hoang Vuong (Contact Author)

Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management ( email )

ULB CP 145/01
21 Ave. F.D. Roosevelt
Brussels, Bruxelles 1050
Belgium
+32-2-6504864 (Phone)
+32-2-6504188 (Fax)

HOME PAGE: http://www.ceb-ulb.com/vuong-quan-hoang.html

Phenikaa University ( email )

To Huu road, Yen Nghia
Ha Dong district
Hanoi, Hanoi 100803
Vietnam

HOME PAGE: http://sites.google.com/site/vuongqh2019/

Nancy K. Napier

Boise State University - College of Business & Economics ( email )

1910 University Drive
Boise, ID 83725
United States
208 426-1314 (Phone)
208 426-3637 (Fax)

HOME PAGE: http://cobe.boisestate.edu/graduate/faculty/VITAES/html%20format/Nancy%20Napier.htm

Donaldine Samson

Stamford International University ( email )

16, Motorway Road - Km2
Prawet
Bangkok, Phetchaburi 10250
Thailand

Hong Kong Nguyen

Ritsumeikan Asia Pacific University, Students ( email )

Beppu
Japan

Toan Viet Info Service ( email )

D4 Giang Vo
Ba Dinh
Hanoi
Vietnam

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