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Mafias and Firms

Author

Listed:
  • Arellano-Bover, Jaime
  • De Simoni, Marco
  • Guiso, Luigi
  • Macchiavello, Rocco
  • Marchetti, Domenico J.
  • Prem, Mounu

Abstract

Infiltration of the legal economy by criminal organizations (OCGs) is potentially significant, though how pervasive remains uncertain. Beyond the volume, the motives driving infiltration are of serious policy concern. We introduce a conceptual framework to differentiate between OCGs’ motives for infiltrating legal firms and validate it using new data from the Italian Financial Intelligence Unit. About 2% of Italian firms appear to have links with OCGs, with three primary motives. Firms established by OCGs are predominantly used for criminal activities (functional motive). Medium-sized firms, often infiltrated post-creation, primarily reflect a competitive motive, wherein criminal activities benefit the firm. Lastly, large, well-established firms remain separate from criminal activities and are used for pecuniary and non-pecuniary returns, such as to establish political connections (pure motive). This so far unnoticed motive accounts for a substantial share of OCGs’ infiltration.

Suggested Citation

  • Arellano-Bover, Jaime & De Simoni, Marco & Guiso, Luigi & Macchiavello, Rocco & Marchetti, Domenico J. & Prem, Mounu, 2024. "Mafias and Firms," SocArXiv sr6ep, Center for Open Science.
    • Handle: RePEc:osf:socarx:sr6ep
    DOI: 10.31219/osf.io/sr6ep
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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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