IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v112y2022i8p2748-73.html
   My bibliography  Save this article

The Economic Effects of Mafia: Firm Level Evidence

Author

Listed:
  • Litterio Mirenda
  • Sauro Mocetti
  • Lucia Rizzica

Abstract

We analyze the effects of Mafia infiltration in the legal economy. Combining information from investigative records with panel data on firms' governance and balance sheets, we build an indicator of infiltration in firms located in an area with no tradition of Mafia. We show that Mafia targets young and less efficient firms and that infiltration generates a significant rise in firms' revenues, with no proportionate growth in production inputs and a deterioration of the firm's financial situation leading to market exit. These findings are consistent with a story of predatory behavior in which infiltration is used for money laundering or rent extraction.

Suggested Citation

  • Litterio Mirenda & Sauro Mocetti & Lucia Rizzica, 2022. "The Economic Effects of Mafia: Firm Level Evidence," American Economic Review, American Economic Association, vol. 112(8), pages 2748-2773, August.
    • Handle: RePEc:aea:aecrev:v:112:y:2022:i:8:p:2748-73
    DOI: 10.1257/aer.20201015
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20201015
    Download Restriction: no
    File URL: https://doi.org/10.3886/E160421V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aer.20201015.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aer.20201015.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/aer.20201015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krahé, Max, 2023. "Italiens Stagnation verstehen," Papers 277907, Dezernat Zukunft - Institute for Macrofinance, Berlin.
    2. Forgione, Antonio Fabio & Migliardo, Carlo, 2023. "Mafia risk perception: Evaluating the effect of organized crime on firm technical efficiency and investment proclivity," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    3. Krahé, Max, 2023. "Understanding Italy's stagnation," Papers 277913, Dezernat Zukunft - Institute for Macrofinance, Berlin.
    4. Paolo Buonanno & Irene Ferrari & Alessandro Saia, 2023. "ALL IS NOT LOST: Organized Crime and Social Capital Formation," Working Papers 2023: 16, Department of Economics, University of Venice "Ca' Foscari", revised 2024.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:112:y:2022:i:8:p:2748-73. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.