Mergers and acquisitions: CEO duality, operating performance and stock returns in Vietnam

• With a proper monitoring system, the benefits of CEO duality outweigh its agency costs.
• CEO duality positively impacts M&A acquirer returns in Vietnam.
• CEO duality may improve M&A performance, measured by changes in earnings growth.
• Robustness check includes two stage least square regression and propensity score matching.

The market for corporate control in Vietnam is characterized by the absence of major antitakeover provisions typically available in developed markets. The disciplinary threat of losing corporate control and additional monitoring mechanisms in the Vietnamese institutional setting reduce managerial entrenchment and other agency costs of CEO duality. This paper provides evidence in support of stewardship theory that CEO duality positively impacts M&A results in Vietnam. Specifically, CEO duality firms have significantly higher announcement abnormal returns and growth performance than those with separate CEO/Chairman roles. Robustness checks include two stage least square regressions and propensity score matching techniques.