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The impact of crime on the enterprise sector: Transition versus non-transition countries

Author

Listed:
  • Libor Krkoska

    (European Bank of Reconstruction and Development)

  • Katrin Robeck

    (European Bank of Reconstruction and Development)

Abstract

The need to protect property rights and fight against crime and corruption continues to be an urgent task for authorities in many developing and transition countries. This paper identifies the factors explaining why some enterprises are more likely to be targeted by crime than others, and analyses the impact of crime on enterprise performance and behaviour in a simple modelling framework. The results of enterprise surveys conducted in 34 countries in Europe and Asia during 2002 and 2005 show that higher rates of crime are particularly associated with the weak development of micro enterprises in the services sector, operating in large countries with high unemployment. The paper also highlights the deterrent effect of crime on FDI inflows and job creation, especially in less advanced transition countries, providing empirical evidence to substantiate the importance of the fight against crime for economic development.

Suggested Citation

  • Libor Krkoska & Katrin Robeck, 2006. "The impact of crime on the enterprise sector: Transition versus non-transition countries," Working Papers 97, European Bank for Reconstruction and Development, Office of the Chief Economist.
    • Handle: RePEc:ebd:wpaper:97
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    More about this item

    Keywords

    crime; enterprise performance and behaviour; enterprise survey; transition; development;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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