Open AccessTHE EFFECT OF ACQUISITION ANNOUCEMENTS ON THE RATE OF RETURNS OF ACCQUIRING FIRMS AND TARGET FIRMS IN VIET NAM
Author(s) -
Hien Thu Nguyen,
Luat Tuong Le
Publication year - 2011
Publication title -
khoa học công nghệ
Language(s) - English
Resource type - Journals
ISSN - 1859-0128
DOI - 10.32508/stdj.v14i2.1927
Subject(s) - hubris , corporate governance , business , stock market , agency cost , agency (philosophy) , information asymmetry , viet nam , stock (firearms) , monetary economics , event study , financial economics , economics , finance , shareholder , economy , biology , mechanical engineering , paleontology , context (archaeology) , horse , epistemology , engineering , history , classics , philosophy
Merger and acquisition (M&A) is a major decision of firms initiated by various motivations. This analysis aims at identifying motives of M&A by using event study. Despite the short development of M&A in Vietnam and the immaturity of the country’s stock market which limit findings of strong evidence, some significant conclusions about M&A in Vietnam are effectively made. No matter what motives are pursued, target firms consistently benefit from M&A deals. For acquirers, evidence shows that M&A in Vietnam is due to management hubris, and agency problem. This evidence supports studies by Mollers et al. (2004) and Jensen (2004). Evidence for information asymmetry and corporate governance problem at acquirors’ firms is also found, supporting hypothesis by Chang (1998). In addition, results also show that market does not believe synergy is a motive for M&A in Vietnam.