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Organized Crime and Foreign Direct Investment: The Italian Case

30 Pages Posted: 17 Feb 2008  

Vittorio Daniele

Magna Graecia University of Catanzaro

Ugo Marani

University of Naples Federico II - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 2008

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.

Keywords: FDI determinants, Italy, Mezzogiorno, crime, regional attractiveness

JEL Classification: F23, R30, R38

Suggested Citation

Daniele, Vittorio and Marani , Ugo, Organized Crime and Foreign Direct Investment: The Italian Case (January 2008). Available at SSRN: https://ssrn.com/abstract=1094329 or http://dx.doi.org/10.2139/ssrn.1094329

Vittorio Daniele (Contact Author)

Magna Graecia University of Catanzaro ( email )

Viale Europa - Germaneto
Catanzaro, Catanzaro 88100
Italy

Ugo Marani

University of Naples Federico II - Department of Economics ( email )

Via Cintia Monte S. Angelo
Napoli, 80126
Italy
+39081675029 (Phone)
+39081675014 (Fax)

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