Organized Crime and Firms: Evidence from Anti-Mafia Enforcement Actions
82 Pages Posted: 23 Sep 2018 Last revised: 27 Jun 2023
Date Written: June 27, 2023
Abstract
We exploit staggered municipality-level anti-mafia enforcement actions in Italy over the
1995–2015 period to study how the presence of organized crime affects firms. Following
enforcement actions, we find increases in competition (i) among firms and (ii) for public
procurement contracts. Firms that do not exit after a weakening of organized crime shrink in
size, more so when operating in the non-tradable sector. Our findings are consistent with
organized crime acting as a barrier to entry and affecting local economic activity.
Keywords: Organized Crime, Corruption, Competition, Money Laundering
JEL Classification: D73, K42, G38, H75
Suggested Citation: Suggested Citation