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Resisting to the Extortion Racket: an Empirical Analysis

Author

Listed:
  • Michele Battisti

    (Università di Palermo)

  • Andrea Mario Lavezzi

    (Università di Palermo)

  • Lucio Masserini

    (Università di Pisa)

  • Monica Pratesi

    (Università di Pisa)

Abstract

In this paper we perform a statistical evaluation of whether it is worthwhile, in economic terms, to resist to extortion demands by the ma a, from the point of view of rms operating in an area dominated by criminal organizations. We use a unique collected and matched database on rm characteristics on the city of Palermo, highly controlled by the ma a racket. The underlined idea is that the claimed resistance has (direct and indirect) costs and bene ts, so that a rational rm should take this decision according its economic expectations on the future pro ts (in addition to potential ethic considerations). It means that the economic policy messages of this experience can be linked to make more pro table the racket resistance (as a signal sent to the market). Our evidences based on multilevel discrete choice models show that this decision is strongly in uenced by socio-economic characteristics of the district, type of activity involved and other factors.

Suggested Citation

  • Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, 2014. "Resisting to the Extortion Racket: an Empirical Analysis," Working Papers LuissLab 14115, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    • Handle: RePEc:lui:lleewp:14115
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    1. Sophia Rabe‐Hesketh & Anders Skrondal, 2006. "Multilevel modelling of complex survey data," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(4), pages 805-827, October.
    2. Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, 2018. "Resisting the extortion racket: an empirical analysis," European Journal of Law and Economics, Springer, vol. 46(1), pages 1-37, August.
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    5. Anders Skrondal & Sophia Rabe‐Hesketh, 2009. "Prediction in multilevel generalized linear models," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 172(3), pages 659-687, June.
    6. Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, "undated". "Resisting the Extortion Racket:an Empirical Analysis," Discussion Papers 2015/207, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    7. Andrea Mario Lavezzi, 2008. "Economic structure and vulnerability to organised crime: Evidence from Sicily," Global Crime, Taylor & Francis Journals, vol. 9(3), pages 198-220, August.
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    Cited by:

    1. Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, 2018. "Resisting the extortion racket: an empirical analysis," European Journal of Law and Economics, Springer, vol. 46(1), pages 1-37, August.
    2. Alaka Shree Prasad & Biswajit Mandal, 2019. "Time zone difference, skill formation and corrupt informal sector: the role of virtual trade," Indian Economic Review, Springer, vol. 54(2), pages 261-290, December.
    3. Prasad, Alaka Shree & Mandal, Biswajit, 2019. "Virtual trade between different time zones, educational capital and corrupt informal sector," MPRA Paper 96963, University Library of Munich, Germany.
    4. Giovanni Bernardo & Irene Brunetti & Mehmet Pinar & Thanasis Stengos, 2021. "Measuring the presence of organized crime across Italian provinces: a sensitivity analysis," European Journal of Law and Economics, Springer, vol. 51(1), pages 31-95, February.

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    More about this item

    Keywords

    Organized Crime; Racketeering; Economic Growth; Discrete choice models.;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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