Organized Crime and Firms: Evidence from Antimafia Enforcement Actions

Pablo Slutzky () and Stefan Zeume ()
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Pablo Slutzky: Department of Finance, University of Maryland, College Park, Maryland 20742
Stefan Zeume: Department of Finance, University of Illinois at Urbana-Champaign, Champaign, Illinois 61820

Management Science, 2024, vol. 70, issue 10, 6569-6596

Abstract: We exploit staggered municipality-level antimafia enforcement actions in Italy over the 1995–2015 period to study how the presence of organized crime affects firms. Following enforcement actions, we find increases in competition (i) among firms and (ii) for public procurement contracts. Firms that do not exit after a weakening of organized crime shrink in size, more so when operating in the nontradable sector. Our findings are consistent with organized crime acting as a barrier to entry and affecting local economic activity.

Keywords: organized crime; corruption; competition; money laundering (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:10:p:6569-6596

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