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Organized Crime and Foreign Direct Investment: the Italian Case

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  • Vittorio, Daniele
  • Ugo, Marani

Abstract

The paper estimates the effects of organized crime on FDI inflows in 103 Italian provinces in the period 2004-06. The presence of organized crime at a provincial level is quantified through several indicators, based on data for different kinds of crimes: extortion; association for criminal purposes, including mafia (Art. 416 and 416 bis of the Italian Penal Code); attacks; arson. Several control variables are used, included a proxy for (financial) investment incentives provided by public sectors. Estimation suggests that FDI inflows are influenced by different variables. Our results show that the extent of extortion and the number of persons denounced for "criminal association" are significantly and negatively correlated with FDI inflows. Finally, our analysis suggests the presence of organized crime is a strong disincentive for foreign investors, particularly in the less developed Italian provinces.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7217.

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Date of creation: 05 Feb 2008
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Handle: RePEc:pra:mprapa:7217

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

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Citations

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Cited by:
  1. Pugno, Maurizio & Lisi, Gaetano, 2010. "Entrepreneurship and the Hidden Economy: An Extended Matching Model," MPRA Paper 25301, University Library of Munich, Germany.
  2. Silvia Gómez Soler, 2012. "Organized Crime, Foreign Investment and Economic Growth," REVISTA ECONOMÍA & REGIÓN, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR.
  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. 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.

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