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Organized Crime and Firms: Evidence from Antimafia Enforcement Actions

Author

Listed:
  • 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)

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.

Suggested Citation

  • Pablo Slutzky & Stefan Zeume, 2024. "Organized Crime and Firms: Evidence from Antimafia Enforcement Actions," Management Science, INFORMS, vol. 70(10), pages 6569-6596, October.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:10:p:6569-6596
    DOI: 10.1287/mnsc.2021.00859
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