Relationship between Innovations, Capital Expenditures and Post-M&A Performance: Evidence from Vietnam, 2005-2012

The IUP Journal of Business Strategy, Vol. XI, No. 1, March 2014, pp. 34-41

8 Pages Posted: 18 Sep 2014 Last revised: 4 May 2017

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

Donaldine Samson

Stamford International University

Date Written: September 17, 2014

Abstract

The paper attempts to explore the plausibility and validity of theoretical relationship between determination of controlling an acquired firm’s capital, assets and brand values versus its capability of innovation, and ex post performance of Vietnam’s M&A industry amid the resurgence of the Mergers and Acquisitions (M&A) wave from 2005 to 2012. The study mainly employs logistic regressions performed on a categorical data sample, consisting of 212 M&A cases. The results reported from this analysis suggest significant and plausible relationship between pre-M&A pursuit of innovation (versus capital/physical assets) of the acquired and post-M&A performance. In addition, pre-M&A expenditures tend to cause poor post-M&A performance. As a plausible reasoning, the paper concludes that creative performance can be a factor to pursue in M&As, which suggests the need to emphasize capable and willing human capital. However, in a wave of M&A where pursuits of capital resources, assets and brand value are overemphasized, the influence of innovation factor to the ex post success becomes negligible.

Suggested Citation

Vuong, Quan Hoang and Napier, Nancy K and Samson, Donaldine, Relationship between Innovations, Capital Expenditures and Post-M&A Performance: Evidence from Vietnam, 2005-2012 (September 17, 2014). The IUP Journal of Business Strategy, Vol. XI, No. 1, March 2014, pp. 34-41, Available at SSRN: https://ssrn.com/abstract=2497350

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 ( email )

1910 University Drive
Boise, ID 83716
United States

Donaldine Samson

Stamford International University ( email )

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

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