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Resisting the extortion racket: an empirical analysis

Author

Listed:
  • Michele Battisti

    (University of Palermo)

  • Andrea Mario Lavezzi

    (University of Palermo)

  • Lucio Masserini

    (University of Pisa)

  • Monica Pratesi

    (University of Pisa)

Abstract

While the contributions on the organized crime and Mafia environments are many, there is a lack of empirical evidence on the firm’s decision to resist to extortion. Our case study is based on Addiopizzo, an NGO that, from 2004, invites firms to refuse requests from the local Mafia and to join a public list of “non-payers”. The research is based on a dataset obtained linking the current administrative archives maintained by the chambers of commerce and the list updated by the NGO. The objective of this paper is twofold: first, to gather sound data on the characteristics of the Addiopizzo joiners; second to model the probability to join Addiopizzo by a two-level logistic regression model. We find that the resilience behavior is likely to be the result of both individual (firm) and environmental factors. In particular, we find that firm’s total assets, firm’s age and being in the construction sector are negatively correlated with the probability of joining AP, while a higher level of human capital embodied in the firm and a higher number of employees are positively correlated. Among the district-level variables, we find that the share of district’s population is negatively correlated with the probability to join, while a higher level of socio-economic development, including education levels, are positively correlated.

Suggested Citation

  • Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, 2018. "Resisting the extortion racket: an empirical analysis," European Journal of Law and Economics, Springer, vol. 46(1), pages 1-37, August.
    • Handle: RePEc:kap:ejlwec:v:46:y:2018:i:1:d:10.1007_s10657-018-9589-4
    DOI: 10.1007/s10657-018-9589-4
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    Cited by:

    1. Michele Battisti & Andrea Mario Lavezzi & Lucio Masserini & Monica Pratesi, 2018. "Resisting the extortion racket: an empirical analysis," European Journal of Law and Economics, Springer, vol. 46(1), pages 1-37, August.
    2. Alaka Shree Prasad & Biswajit Mandal, 2019. "Time zone difference, skill formation and corrupt informal sector: the role of virtual trade," Indian Economic Review, Springer, vol. 54(2), pages 261-290, December.
    3. Prasad, Alaka Shree & Mandal, Biswajit, 2019. "Virtual trade between different time zones, educational capital and corrupt informal sector," MPRA Paper 96963, University Library of Munich, Germany.
    4. Giovanni Bernardo & Irene Brunetti & Mehmet Pinar & Thanasis Stengos, 2021. "Measuring the presence of organized crime across Italian provinces: a sensitivity analysis," European Journal of Law and Economics, Springer, vol. 51(1), pages 31-95, February.

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    More about this item

    Keywords

    Organized crime; Extortion; Social mobilization; Multilevel regression models;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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