Optimizing m&a performance: Can economic and political conditions be a key consideration?

Abstract

This paper focuses on analyzing the influence of economic and political conditions on the effectiveness of mergers and acquisitions (M&A) activities in the period 2011-2024 in the context of Vietnam. In addition, the authors also focus on finding an M&A performance construct measure to fill the gap that previous studies encountered (the measurement method only focused on one financial indicator). In the context of globalization and increasing competition, the factors affecting the effectiveness of M&A activities in practice are still controversial due to the differences in previous research results. The study applies quantitative methods, using secondary data from M&A transactions of acquiring companies listed on the HOSE occurring in the period 2011-2024. The methods used include event studies, accounting methods, and multivariate regression models combined with the IVs-2SLS method to control for endogenous factors and increase the accuracy in assessing the relationship between variables. The research results contribute to the theory by identifying the impact of economic and political conditions on M&A performance while expanding the measurement of performance through both financial and non-financial aspects. In practice, the study proposes a method to help businesses make reasonable M&A decisions, and at the same time, the study makes recommendations for the government in formulating policies to support Vietnamese businesses in implementing M&A more effectively, contributing to improving this activity and developing the Vietnamese economy in the integration period.