This study is focused on finding what impact the debt of co-op organizations has on cession prices. This is performed through a quantitative method, using multiple multi-linear regression analysis on a sample of 322 observations of co-op purchases in the inner areas of Stockholm.
The regressions are also applied to different sub-samples constructed within the observations. Previous theories and research on price fixing, capital structure and market efficiency are discussed in the context of the results. This study also presents a brief discussion on the structure of the Swedish housing market.
The results show that the debt-ratios do not significantly affect the cession prices. However, the nominal amount of debt per co-op affects the cession price negatively. The results also show that co-op sizes, the monthly fee and the number of rooms do affect the price significantly. Also, common assumptions about co-ops, such as the idea that new co-op organizations would have more debt than old ones, are explored empirically.
The market-to-book-ratio of the observations is also calculated in order to explain the results from the coefficient for booked debt and debt-ratios.
Source: Stockholm University
Author: Binaku, Ifete | Lingbrant, Peter