Mafia Infiltrations in Times of Crisis: Evidence from the COVID-19 Shock

Marco Castelluccio and Lucia Rizzica

Journal of Law and Economics, 2026, vol. 69, issue 3, 589 - 624

Abstract: We analyze the risk of mafia capture of firms operating in the legal economy. To overcome possible endogeneity concerns we exploit the abrupt drop in revenues caused by the COVID-19-related closures imposed in spring 2020 in Italy. We find that the induced sudden and significant worsening of affected firms’ financial conditions increased the likelihood of them being infiltrated by mafia-connected entrepreneurs: A 10 percent drop in revenues leads to a 4.9 percent increase in the probability of mafia entry. We further show that firms are more likely to resort to mafia lending when they face temporary difficulties in repaying their debts.

Date: 2026
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