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Mafia Infiltrations in Times of Crisis: Evidence from the COVID-19 Shock

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  • Marco Castelluccio
  • Lucia Rizzica

Abstract

We analyze the risk of mafia capture of firms operating in the legal economy. To overcome possible endogeneity concerns we exploit the abrupt drop in revenues caused by the COVID-19-related closures imposed in spring 2020 in Italy. We find that the induced sudden and significant worsening of affected firms’ financial conditions increased the likelihood of them being infiltrated by mafia-connected entrepreneurs: A 10 percent drop in revenues leads to a 4.9 percent increase in the probability of mafia entry. We further show that firms are more likely to resort to mafia lending when they face temporary difficulties in repaying their debts.

Suggested Citation

  • Marco Castelluccio & Lucia Rizzica, 2026. "Mafia Infiltrations in Times of Crisis: Evidence from the COVID-19 Shock," Journal of Law and Economics, University of Chicago Press, vol. 69(3), pages 589-624.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/738359
    DOI: 10.1086/738359
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    Cited by:

    1. Adriano Amati & Monica Billio & Marco Di Cataldo & Giovanni Mastrobuoni, 2026. "Mafia Connections: Infiltration in Corporate Ownership," Working Papers 2026: 24, Department of Economics, University of Venice "Ca' Foscari".

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