Control of emerging-market target and stock performance: Evidence in Vietnam

Abstract

Joining the upward trend of Global Foreign direct investment and FDI in emerging economies and emerging Asian economies, FDI to Vietnam, especially M&As have increased significantly in both numbers and value of deals from 1995 to 2015. Compared with the deal triggered by a firm from Vietnam or another developing country, the deal triggered by a developed market acquirer dominates the peers in terms of return for the acquirer’s shareholder. The acquirer’s shareholder gains on their investment spent on the Vietnamese acquirer. Especially, the transfer in control of Vietnamese firms to developed-market acquirers drives the statistically significant return using the event study with the OLS market model approach