The Economic Consequences of Criminal Firms

Presented at the 2019 Global Issues in Accounting Conference at Chicago Booth

41 Pages Posted: 5 Sep 2019 Last revised: 14 Sep 2021

Date Written: January 18, 2021

Abstract

This paper investigates the economic consequences of firms connected to organized crime (criminal firms) and shows that when a criminal firm is eliminated from an industry, the performance of non-criminal competitors significantly increases. We also show that the positive effect on the performance of the non-criminal competitors includes improved efficiency reached after the elimination of the criminal competitor. Overall we provide evidence that criminal firms play a crucial role in hampering competition and shows that the economic costs imposed by organized crime are not exclusively linked to a deterioration of the institutional environment.

Keywords: organized crime, competition, performance, Mafia, corporate connections

JEL Classification: M10, M41, G30

Suggested Citation

Fabrizi, Michele and Parbonetti, Antonio, The Economic Consequences of Criminal Firms (January 18, 2021). Presented at the 2019 Global Issues in Accounting Conference at Chicago Booth, Available at SSRN: https://ssrn.com/abstract=3444839 or http://dx.doi.org/10.2139/ssrn.3444839

Michele Fabrizi (Contact Author)

University of Padua ( email )

Via del Santo, 33
Padova, Padova 35123
Italy

Antonio Parbonetti

University of Padua ( email )

Via del Santo 33
Padova, 35123
Italy
+39 049 8274261 (Phone)

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