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Organized Crime and Foreign Direct Investment: the Italian Case

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  • Vittorio, Daniele
  • Ugo, Marani

Abstract

The paper estimates the effects of organized crime on FDI inflows in 103 Italian provinces in the period 2004-06. The presence of organized crime at a provincial level is quantified through several indicators, based on data for different kinds of crimes: extortion; association for criminal purposes, including mafia (Art. 416 and 416 bis of the Italian Penal Code); attacks; arson. Several control variables are used, included a proxy for (financial) investment incentives provided by public sectors. Estimation suggests that FDI inflows are influenced by different variables. Our results show that the extent of extortion and the number of persons denounced for "criminal association" are significantly and negatively correlated with FDI inflows. Finally, our analysis suggests the presence of organized crime is a strong disincentive for foreign investors, particularly in the less developed Italian provinces.

Suggested Citation

  • Vittorio, Daniele & Ugo, Marani, 2008. "Organized Crime and Foreign Direct Investment: the Italian Case," MPRA Paper 7217, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7217
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    Cited by:

    1. Naddeo, Andreina, 2014. "How crime affects the economy: evidence from Italy," MPRA Paper 65419, University Library of Munich, Germany.
    2. repec:spr:etbull:v:5:y:2017:i:2:d:10.1007_s40505-017-0116-5 is not listed on IDEAS
    3. Silvia Gómez Soler, 2012. "Organized Crime, Foreign Investment and Economic Growth," REVISTA ECONOMÍA & REGIÓN, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR, vol. 6(2), pages 5-32, December.
    4. Slim, Sadri, 2015. "Un modelo Mundell-Fleming con economía ilegal y lavado de dinero
      [Modeling illegal economy and money laundering: a Mundell-Fleming framework]
      ," MPRA Paper 64675, University Library of Munich, Germany.
    5. Kyriakos C. Neanidis & Maria Paola Rana, 2014. "Entrepreneurs, Risk Aversion and Dynamic Firms," Centre for Growth and Business Cycle Research Discussion Paper Series 190, Economics, The Univeristy of Manchester.
    6. repec:kap:annfin:v:13:y:2017:i:3:d:10.1007_s10436-017-0299-7 is not listed on IDEAS
    7. Roberto Antonietti & Raffaello Bronzini & Giulio Cainelli, 2015. "Inward greenfield FDI and innovation," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 93-116, March.
    8. Attilio Di Battista, 2013. "The Role of Geography and Institutions in determining FDI flows into Italian Provinces," ERSA conference papers ersa13p1185, European Regional Science Association.
    9. Gaetano Lisi & Maurizio Pugno, 2010. "Entrepreneurship and the Hidden Economy: An Extended Matching Model," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 587-605.
    10. Gaetano Lisi, 2010. "The Strange Case of Dr. “Unemployed” and Mr “Hidden” in Italy," Economics Bulletin, AccessEcon, vol. 30(4), pages 2802-2816.
    11. Nicola Daniele Coniglio & Giuseppe Celi & Cosimo Scagliusi, 2010. "Organized Crime, Migration and Human Capital Formation: Evidence from the South of Italy," SERIES 0028, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Mar 2010.
    12. Silvia Fedeli & Vito Mariella & Marco Onofri, "undated". "Determinants of joblessness during the economic crisis: the impact of criminality in the Italian labour market," Working Papers 176, University of Rome La Sapienza, Department of Public Economics.
    13. repec:idb:idbbks:385 is not listed on IDEAS
    14. repec:ere:journl:v:xxxvi:y:2017:i:1:p:25-58 is not listed on IDEAS
    15. Keith Blackburn & Kyriakos C. Neanidis & Maria Paola Rana, 2015. "Organized Crime, Corruption and Growth: Theory and Evidence," Centre for Growth and Business Cycle Research Discussion Paper Series 210, Economics, The Univeristy of Manchester.
    16. John Horton & Michele H. Lemay & Cassandra Rogers & Osmel Manzano & Ellen-Rose Kambel & Laura Alonso & Emma Näslund-Hadley & Bailey Klinger & Gangadhar P. Shukla & Dougal Martin & Matthew Shearer & Ri, 2010. "Towards a Sustainable and Efficient State: The Development Agenda of Belize," IDB Publications (Books), Inter-American Development Bank, number 75702 edited by Osmel Manzano & Dougal Martin, February.

    More about this item

    Keywords

    FDI determinants; Italy: Mezzogiorno; crime; regional attractiveness;

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R59 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Other

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