Anti-Mafia Law Enforcement and Lending in Mafia Lands. Evidence from Judicial Administration in Italy

Francesca Calamunci, Alberto De Benedetto Marco () and Silipo Damiano Bruno ()
Additional contact information
Alberto De Benedetto Marco: University of Calabria, Via Ponte Pietro Bucci, Arcavacata di Rende87036, Italy
Silipo Damiano Bruno: University of Calabria, Via Ponte Pietro Bucci, Arcavacata di Rende87036, Italy

The B.E. Journal of Economic Analysis & Policy, 2021, vol. 21, issue 3, 1067-1106

Abstract: The paper analyses the impact of a preventive measure aimed at fighting the criminal organizations’ activities on the bank-firm relationship in the four Italian regions with the highest density of mafia over the period 2004–2016. Taking advantage of the staggered firm-level anti-mafia enforcement actions, we implement a difference-in-differences approach and find that after entering judicial administration mafia-infiltrated firms experience a 19 per cent contraction of bank credit and have a higher probability of being credit rationed than a matched sample of legal companies. We also find that firms confiscated from the mafia experience a negative change in some demand-driven (value of production) and supply-driven (profitability) determinants of loans. Finally, we study whether confiscation of infiltrated firms produces externalities on non-infiltrated companies, and show that banks do not reassess the overall credit risk in local markets.

Keywords: organized crime; bank loans; credit rationing; firm-level data (search for similar items in EconPapers)
JEL-codes: D22 E51 G21 K42 L25 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1515/bejeap-2020-0353 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:21:y:2021:i:3:p:1067-1106:n:9

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.1515/bejeap-2020-0353

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().