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The real effects of 'ndrangheta: firm-level evidence

Author

Listed:
  • Litterio Mirenda

    () (Bank of Italy)

  • Sauro Mocetti

    ()

  • Lucia Rizzica

    () (Bank of Italy)

Abstract

We analyze the real effects of mafia infiltrations in the legal economy. We focus on the case of the 'ndrangheta, a large criminal organization originating from the South of Italy. Combining information from investigative records with panel data on firms' governance and balance sheets, we build an indicator of 'ndrangheta infiltrations in firms located in areas with no tradition of mafia settlements. We show that (i) organized crime targets firms in financial distress and privileges sectors that most rely on public sector demand or are more money laundering prone;; (ii) infiltrations generate a significant rise in the firm's revenues; (iii) the penetration of mafia produces a long-run negative effect on economic growth at the local level.

Suggested Citation

  • Litterio Mirenda & Sauro Mocetti & Lucia Rizzica, 2019. "The real effects of 'ndrangheta: firm-level evidence," Temi di discussione (Economic working papers) 1235, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1235_19
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/temi-discussione/2019/2019-1235/en_tema_1235.pdf
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    References listed on IDEAS

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    Cited by:

    1. Claire Giordano, Paloma Lopez-Garcia, 2018. "Is corruption efficiency-enhancing? A case study of the Central and Eastern European region," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 15(1), pages 119-164, June.
    2. 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.
    3. Lavinia Piemontese, 2020. "Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering," Working Papers halshs-02928546, HAL.
    4. Federico Cingano & Marco Tonello, 2020. "Law Enforcement, Social Control and Organized Crime: Evidence from Local Government Dismissals in Italy," 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 221-254, July.
    5. Valeria Virginia Checchi & Michele Polo, 2020. "Blowing in the Wind: The Infiltration of Sicilian Mafia in the Wind Power Business," 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 325-353, July.
    6. Alfano, Maria Rosaria & Cantabene, Claudia & Silipo, Damiano Bruno, 2019. "Mafia Firms and Aftermaths," ETA: Economic Theory and Applications 294194, Fondazione Eni Enrico Mattei (FEEM).
    7. Calamunci, Francesca M., 2020. "What Happens in Criminal Firms after Godfather Management Removal? Judicial Administration and Firms Performance," GLO Discussion Paper Series 698, Global Labor Organization (GLO).
    8. Lavinia Piemontese, 2020. "Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering," Working Papers 2025, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    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. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D’Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo Sc, 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    organized crime; firm performance; competition;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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