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Revealing “Mafia Inc.”? Financial Crisis, Organized Crime, and the Birth of New Enterprises


Le Moglie, Marco; Sorrenti, Giuseppe (2019). Revealing “Mafia Inc.”? Financial Crisis, Organized Crime, and the Birth of New Enterprises. Working paper series / Department of Economics 251, University of Zurich.

Abstract

We study the investment of organized crime in the legal economy. By using the shock induced on the Italian credit market by the 2007 subprime mortgage crisis, we document how provinces with a high organized crime presence have been impacted less by the crisis in terms of the establishment of new enterprises than provinces with a lower criminal infiltration. We provide evidence that the lower impact of the crisis is consistent with the presence of investments by organized crime in the legal economy. We corroborate this interpretation by comparing our results with the characterization made by the judicial authority of such investments and ruling out possible alternative explanations.

Abstract

We study the investment of organized crime in the legal economy. By using the shock induced on the Italian credit market by the 2007 subprime mortgage crisis, we document how provinces with a high organized crime presence have been impacted less by the crisis in terms of the establishment of new enterprises than provinces with a lower criminal infiltration. We provide evidence that the lower impact of the crisis is consistent with the presence of investments by organized crime in the legal economy. We corroborate this interpretation by comparing our results with the characterization made by the judicial authority of such investments and ruling out possible alternative explanations.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:K42, L26
Uncontrolled Keywords:Mafia, organized crime, established enterprises, crisis
Language:English
Date:December 2019
Deposited On:25 Apr 2017 15:51
Last Modified:06 Dec 2019 12:46
Series Name:Working paper series / Department of Economics
Number of Pages:66
ISSN:1664-7041
Additional Information:Revised version ; Former title: "Mafia Inc.": when godfathers become entrepreneurs
OA Status:Green
Official URL:https://www.econ.uzh.ch/static/release/workingpapers.php?id=930

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