The economic consequences of criminal firms

FBK-IRVAPP is pleased to invite you to the following seminar:
​​“The economic consequences of criminal firms”

With the participation of: Antonio Parbonetti

Language The seminar is held in English.

AbstractThis paper investigates the economic consequences of firms connected to organized crime (criminal firms) and demonstrates that when a criminal firm is eliminated from an industry, the performance of non-criminal competitors significantly increases. We also show that the positive effect on the performance of non-criminal competitors after the elimination of the criminal competitor includes improved efficiency and reduced procurement costs. Finally, we document that financially constrained firms benefit the most from the elimination of the criminal competitors and that the presence of criminal firms reduces the level of investment of peers firms. Overall, we provide evidence that criminal firms play a crucial role in hampering competitors’ performance and that the economic costs imposed by organized crime are not exclusively linked to the deterioration of the institutional environment