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Organized Crime and Foreign Direct Investment: The Italian Case

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  • Vittorio Daniele
  • Ugo Marani

Abstract

This paper examines the impact of organized crime on the regional distribution of foreign direct investment (FDI) inflows into Italy. The incidence of crime has been calculated considering the number of complaints for different crimes. The analysis shows how the correlation between organized crime is both negative and significant. This relationship appears strong even when a financial investment incentives indicator is included into the regressions. Furthermore, such a correlation between crime and FDI seems to be valid only for certain crimes, traditionally related to the presence of organized crime of the Mafia type. Although our analysis shows that organized crime is, in itself, a disincentive for investment, it also suggests that certain levels of crime can be perceived by foreign investors as a signal of an unfavorable business climate.

Suggested Citation

  • Vittorio Daniele & Ugo Marani, 2008. "Organized Crime and Foreign Direct Investment: The Italian Case," CESifo Working Paper Series 2416, CESifo.
    • Handle: RePEc:ces:ceswps:_2416
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    Cited by:

    1. Naddeo, Andreina, 2014. "How crime affects the economy: evidence from Italy," MPRA Paper 65419, University Library of Munich, Germany.
    2. Keith Blackburn & Kyriakos C. Neanidis & Maria Paola Rana, 2017. "A theory of organized crime, corruption and economic growth," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 227-245, October.
    3. Silvia Gómez Soler, 2012. "Organized Crime, Foreign Investment and Economic Growth," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 6(2), pages 5-32, December.
    4. Slim, Sadri, 2015. "Un modelo Mundell-Fleming con economía ilegal y lavado de dinero [Modeling illegal economy and money laundering: a Mundell-Fleming framework]," MPRA Paper 64675, University Library of Munich, Germany.
    5. Kyriakos C. Neanidis & Maria Paola Rana, 2014. "Entrepreneurs, Risk Aversion and Dynamic Firms," Centre for Growth and Business Cycle Research Discussion Paper Series 190, Economics, The University of Manchester.
    6. Kyriakos C. Neanidis & Maria Paola Rana & Keith Blackburn, 2017. "An empirical analysis of organized crime, corruption and economic growth," Annals of Finance, Springer, vol. 13(3), pages 273-298, August.
    7. Roberto Antonietti & Raffaello Bronzini & Giulio Cainelli, 2015. "Inward greenfield FDI and innovation," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(1), pages 93-116, March.
    8. Attilio Di Battista, 2013. "The Role of Geography and Institutions in determining FDI flows into Italian Provinces," ERSA conference papers ersa13p1185, European Regional Science Association.
    9. repec:idb:brikps:385 is not listed on IDEAS
    10. Gaetano Lisi & Maurizio Pugno, 2010. "Entrepreneurship and the Hidden Economy: An Extended Matching Model," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 587-605.
    11. Gaetano Lisi, 2010. "The Strange Case of Dr. “Unemployed” and Mr “Hidden” in Italy," Economics Bulletin, AccessEcon, vol. 30(4), pages 2802-2816.
    12. Nicola Daniele Coniglio & Giuseppe Celi & Cosimo Scagliusi, 2010. "Organized Crime, Migration and Human Capital Formation: Evidence from the South of Italy," SERIES 0028, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Mar 2010.
    13. Silvia Fedeli & Vitantonio Mariella & Marco Onofri, 2018. "Determinants of Joblessness During the Economic Crisis: Impact of Criminality in the Italian Labour Market," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(2), pages 559-588, September.
    14. Cerro, Ana María & Rodríguez Andrés, Antonio, 2010. "The Effect of Crime on the Job Market: An ARDL approach to Argentina," MPRA Paper 44457, University Library of Munich, Germany.
    15. Horton, John & Lemay, Michele H. & Rogers, Cassandra & Manzano, Osmel & Kambel, Ellen-Rose & Alonso, Laura & Näslund-Hadley, Emma & Klinger, Bailey & Shukla, Gangadhar P. & Martin, Dougal & Shearer, M, 2010. "Towards a Sustainable and Efficient State: The Development Agenda of Belize," IDB Publications (Books), Inter-American Development Bank, number 385, November.
    16. Víctor Hugo Torres Preciado, 2017. "Desempleo y criminalidad en los estados de la frontera norte de México: un enfoque espacial bayesiano de vectores auto-regresivos. (Unemployment and crime in the Northern-border states of Mexico: a sp," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 25-58, May.
    17. Keith Blackburn & Kyriakos C. Neanidis & Maria Paola Rana, 2015. "Organized Crime, Corruption and Growth: Theory and Evidence," Centre for Growth and Business Cycle Research Discussion Paper Series 210, Economics, The University of Manchester.
    18. John Horton & Michele H. Lemay & Cassandra Rogers & Osmel Manzano & Ellen-Rose Kambel & Laura Alonso & Emma Näslund-Hadley & Bailey Klinger & Gangadhar P. Shukla & Dougal Martin & Matthew Shearer & Ri, 2010. "Towards a Sustainable and Efficient State: The Development Agenda of Belize," IDB Publications (Books), Inter-American Development Bank, number 75702 edited by Osmel Manzano & Dougal Martin, February.

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    More about this item

    Keywords

    FDI determinants; Italy; crime; regional attractiveness;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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