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Revealing "Mafia Inc."? Financial Crisis, Organized Crime, and the Birth of New Enterprises

Author

Listed:
  • Marco Le Moglie

    (Catholic University of the Sacred Heart)

  • Giuseppe Sorrenti

    (University of Amsterdam)

Abstract

We study the investment of organized crime in the legal economy. By using the shock induced on the Italian credit market by the 2007 subprime mortgage crisis, we document how provinces with a high organized crime presence have been affected less by the crisis in terms of the establishment of new enterprises than provinces with a lower criminal infiltration. We provide evidence that the lower impact of the crisis is consistent with the presence of investments by organized crime in the legal economy. We corroborate this interpretation by comparing our results with the characterization made by the judicial authority of such investments.

Suggested Citation

  • Marco Le Moglie & Giuseppe Sorrenti, 2022. "Revealing "Mafia Inc."? Financial Crisis, Organized Crime, and the Birth of New Enterprises," The Review of Economics and Statistics, MIT Press, vol. 104(1), pages 142-156, March.
    • Handle: RePEc:tpr:restat:v:104:y:2022:i:1:p:142-156
    DOI: 10.1162/rest_a_00942
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    Citations

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    Cited by:

    1. Hjalmarsson, Randi & Machin, Stephen & Pinotti, Paolo, 2024. "Crime and the labor market," Handbook of Labor Economics,, Elsevier.
    2. Tomas Williams & Pablo Slutzky & Mauricio Villamizar-Villegas, 2019. "Drug Money and Bank Lending: The Unintended Consequences of Anti-Money Laundering Policies," Working Papers 2019-5, The George Washington University, Institute for International Economic Policy, revised May 2020.
    3. Rafael Prieto-Curiel & Dieter Grass & Stefan Wrzaczek & Gian Maria Campedelli & Gernot Tragler & Gustav Feichtinger, 2025. "Reducing Cartel Violence: The Mexican Dilemma Between Social and Security Spending," Papers 2508.06509, arXiv.org.
    4. Murphy, Tommy E. & Rossi, Martín A., 2020. "Following the poppy trail: Origins and consequences of Mexican drug cartels," Journal of Development Economics, Elsevier, vol. 143(C).
    5. Bernardo Fanfani & Filippo Passerini, 2024. "Do Alternative Work Arrangements Substitute Standard Employment? Evidence from Worker-Level Data," Working Papers wp1190, Dipartimento Scienze Economiche, Universita' di Bologna.
    6. Gianmarco Daniele & Marco De Simoni & Domenico J. Marchetti & Giovanna Marcolongo & Paolo Pinotti, 2025. "A Loan You Can’t Refuse: Credit Rationing and Organized Crime Infiltration of Distressed Firms," CESifo Working Paper Series 12219, CESifo.
    7. Drago, Francesco & Calamunci, Francesca, 2020. "The economic impact of organized crime infiltration in the legal economy: evidence from the judicial administration of organize," CEPR Discussion Papers 14326, C.E.P.R. Discussion Papers.
    8. Alfano, Maria Rosaria & Cantabene, Claudia & Silipo, Damiano Bruno, "undated". "Mafia Firms and Aftermaths," ETA: Economic Theory and Applications 294194, Fondazione Eni Enrico Mattei (FEEM).
    9. Gianmarco Daniele & Gemma Dipoppa, 2018. "Doing Business Below the Line: Screening, Mafias and Public Funds," BAFFI CAREFIN Working Papers 1898, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    10. Nicola Mastrorocco, 2018. "Organised Crime, Captured Politicians and the Allocation of Public Resources," Trinity Economics Papers tep1018, Trinity College Dublin, Department of Economics.
    11. Francesca Calamunci & Francesco Drago, 2020. "The Economic Impact of Organized Crime Infiltration in the Legal Economy: Evidence from the Judicial Administration of Organized Crime Firms," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(2), pages 275-297, July.
    12. repec:osf:socarx:sr6ep_v1 is not listed on IDEAS

    More about this item

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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