IDEAS home Printed from https://ideas.repec.org/p/bdi/wptemi/td_1502_25.html
   My bibliography  Save this paper

Mafia infiltrations in times of crisis: evidence from the Covid-19 shock

Author

Listed:
  • Marco Castelluccio

    (University College London and Institute for Fiscal Studies)

  • Lucia Rizzica

    (Bank of Italy)

Abstract

We analyse the risk of mafia infiltration into firms operating in the legal economy. To address potential endogeneity concerns, we exploit the sharp drop in revenues caused by the Covid-19-related lockdowns imposed in Italy in spring 2020. We find that the induced sudden and significant deterioration in firms' financial conditions increased the likelihood of infiltration by mafia-connected entrepreneurs: a 10 per cent drop in revenues leads to a 4.9 per cent increase in the probability of mafia infiltration. Although the overall prevalence of – and therefore the induced increase in – infiltrated firms is limited in absolute terms, the estimated effect is non-negligible given its implications for the legal economy. We further show that firms are more likely to resort to mafia-linked lending when they face temporary difficulties in repaying their debts.

Suggested Citation

  • Marco Castelluccio & Lucia Rizzica, 2025. "Mafia infiltrations in times of crisis: evidence from the Covid-19 shock," Temi di discussione (Economic working papers) 1502, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1502_25
    as

    Download full text from publisher

    File URL: https://www.bancaditalia.it/pubblicazioni/temi-discussione/2025/2025-1502/en_tema_1502.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_1502_25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bdigvit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.