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Organized Crime and Foreign Direct Investment: The Italian Case

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  • Vittorio Daniele
  • Ugo Marani

Abstract

This paper examines the impact of organized crime on the regional distribution of foreign direct investment (FDI) inflows into Italy. The incidence of crime has been calculated considering the number of complaints for different crimes. The analysis shows how the correlation between organized crime is both negative and significant. This relationship appears strong even when a financial investment incentives indicator is included into the regressions. Furthermore, such a correlation between crime and FDI seems to be valid only for certain crimes, traditionally related to the presence of organized crime of the Mafia type. Although our analysis shows that organized crime is, in itself, a disincentive for investment, it also suggests that certain levels of crime can be perceived by foreign investors as a signal of an unfavorable business climate.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2008/wp-cesifo-2008-10/cesifo1_wp2416rev.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2416.

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Date of creation: 2008
Date of revision:
Handle: RePEc:ces:ceswps:_2416

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Keywords: FDI determinants; Italy; crime; regional attractiveness;

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References

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Citations

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Cited by:
  1. Gaetano Lisi & Maurizio Pugno, 2009. "Entrepreneurship and the Hidden Economy: an Extended Matching Model," Working Papers 2009-04, Universita' di Cassino, Dipartimento di Scienze Economiche.
  2. Attilio Di Battista, 2013. "The Role of Geography and Institutions in determining FDI flows into Italian Provinces," ERSA conference papers ersa13p1185, European Regional Science Association.
  3. Gaetano Lisi, 2010. "The Strange Case of Dr. “Unemployed” and Mr “Hidden” in Italy," Economics Bulletin, AccessEcon, vol. 30(4), pages 2802-2816.
  4. Silvia Gómez Soler, 2012. "Organized Crime, Foreign Investment and Economic Growth," REVISTA ECONOMÍA & REGIÓN, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR.

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