Qualitative Findings: M&A Motivations and Performance Drivers

Nga Pham () and Kok-Boon Oh ()
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Nga Pham: Monash University
Kok-Boon Oh: eGalaxy Solutions

Chapter Chapter 6 in State on Board!, 2021, pp 133-160 from Springer

Abstract: Abstract This chapter presents the findings of the qualitative research related to motivations and performance drivers of M&A. For both SIEs and non-SIEs, key motivations are strategic assets and restructuring for efficiency. However, for M&A of SIEs, there are areas of concerns about expropriation of minority shareholders’ interest, ineffective ownership incentive and low returns on capital invested. These are the manifestation of the principal-principal conflict inherent in SIEs due to the presence of the state shareholder. We use the term “principal cost” to refer to the negative impact of this conflict. We argue that although the principal-principal conflict is a type of agency problem, according to the agency theory, “principal cost” is not and should not be viewed as a subset of agency cost.

Keywords: SOEs; Corporate governance; Emerging markets; Vietnam; M&A motivation; M&A performance; Agency theory; Principal-principal conflict; Principal cost (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-16-3525-0_6

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DOI: 10.1007/978-981-16-3525-0_6

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