Mafias and Firms

68 Pages Posted: 15 Apr 2024

See all articles by Jaime Arellano-Bover

Jaime Arellano-Bover

Yale University

Marco De Simoni

Bank of Italy

Luigi Guiso

Einaudi Institute for Economics and Finance (EIEF)

Rocco Macchiavello

London School of Economics

Domenico Junior Marchetti

Bank of Italy

Mounu Prem

Einaudi Institute for Economics and Finance (EIEF)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2024

Abstract

Infiltration of the legal economy by criminal organizations (OCGs) is potentially significant, though how pervasive remains uncertain. Beyond the volume, the motives driving infiltration are of serious policy concern. We introduce a conceptual framework to differentiate between OCGs’ motives for infiltrating legal firms and validate it using new data from the Italian Financial Intelligence Unit. About 2% of Italian firms appear to have links with OCGs, with three primary motives. Firms established by OCGs are predominantly used for criminal activities (functional motive). Medium-sized firms, often infiltrated post-creation, primarily reflect a competitive motive, wherein criminal activities benefit the firm. Lastly, large, well-established firms remain separate from criminal activities and are used for pecuniary and non-pecuniary returns, such as to establish political connections (pure motive). This so far unnoticed motive accounts for a substantial share of OCGs’ infiltration.

Keywords: organized crime, legal economy, firms, infiltration

JEL Classification: G300, L200, K400

Suggested Citation

Arellano-Bover, Jaime and De Simoni, Marco and Guiso, Luigi and Macchiavello, Rocco and Marchetti, Domenico Junior and Prem, Mounu, Mafias and Firms (March 2024). CESifo Working Paper No. 11043, Available at SSRN: https://ssrn.com/abstract=4793899 or http://dx.doi.org/10.2139/ssrn.4793899

Jaime Arellano-Bover (Contact Author)

Yale University ( email )

493 College St
New Haven, CT CT 06520
United States

Marco De Simoni

Bank of Italy ( email )

Luigi Guiso

Einaudi Institute for Economics and Finance (EIEF) ( email )

Rocco Macchiavello

London School of Economics ( email )

United Kingdom

Domenico Junior Marchetti

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy
+39 6 4792 2256 (Phone)
+39 6 4792 3720 (Fax)

Mounu Prem

Einaudi Institute for Economics and Finance (EIEF) ( email )

Via Due Macelli, 73
Rome, 00187
Italy

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