Closed for mafia: Evidence from the removal of mafia firms on commercial property values

Francesca Calamunci, Livio Ferrante and Rossana Scebba

Journal of Regional Science, 2022, vol. 62, issue 5, 1487-1511

Abstract: Using a sample of almost 7000 Italian municipalities from 2002 to 2019, we investigate how the removal of mafia‐infiltrated firms affects commercial sale and rental prices. We conjecture that targeting mafia businesses leads to a reduction in local disamenities and an increase in the demand for commercial properties. Applying the latest methodologies based on difference‐in‐differences approaches, we show that antimafia policies aimed at confiscating and reassigning mafia firms have positive spillover effects on commercial real estate prices, driving values upward by about 4%. This is especially true for small–medium municipalities in mafia‐ridden provinces. The evidence we provide supports the enforcement of antimafia policies with an economic content, as they pose a threat to criminal financial interests and curb the mafia influence in the market.

Date: 2022
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