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Resisting the Extortion Racket:an Empirical Analysis

Author

Listed:
  • Michele Battisti
  • Andrea Mario Lavezzi
  • Lucio Masserini
  • Monica Pratesi

Abstract

In this paper we study the decision of rms operating in areas where organised crime is pervasive to resist the extortion racket. To this purpose we design a case-control study starting from the unique ex- perience of Addiopizzo (AP), an NGO operating in Palermo (Sicily) which, from 2004, invites rms to resist to the racketeers and join a public list aimed at eliciting critical consumption in favour of rms in the list. We study the determinants of the decision to join AP by estimating a two-level logistic regression model. We nd that rm's total assets and rm's age have a negative effect on the probability of joining AP, while a higher level of human capital embodied in the rm and a higher number of employees increases such probability. Among the district-level variables, we nd that the share of district population reduces the probability to join, while a higher level of socio-economic development, including education levels, increase the probability. We posit that these results support the hypothesis that the decision to join AP is based on a cost-bene t analysis and discuss policy implications of our results. Creation-Date: 2015-07-01

Suggested Citation

  • Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, "undated". "Resisting the Extortion Racket:an Empirical Analysis," Discussion Papers 2015/206, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  • Handle: RePEc:pie:dsedps:2015/206
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    File URL: http://www.ec.unipi.it/documents/Ricerca/papers/2015-206.pdf
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