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- Title
Anti-Mafia Law Enforcement and Lending in Mafia Lands. Evidence from Judicial Administration in Italy.
- Authors
Calamunci, Francesca M.; De Benedetto, Marco Alberto; Silipo, Damiano Bruno
- Abstract
The paper analyses the impact of a preventive measure aimed at fighting the criminal organizations' activities on the bank-firm relationship in the four Italian regions with the highest density of mafia over the period 2004–2016. Taking advantage of the staggered firm-level anti-mafia enforcement actions, we implement a difference-in-differences approach and find that after entering judicial administration mafia-infiltrated firms experience a 19 per cent contraction of bank credit and have a higher probability of being credit rationed than a matched sample of legal companies. We also find that firms confiscated from the mafia experience a negative change in some demand-driven (value of production) and supply-driven (profitability) determinants of loans. Finally, we study whether confiscation of infiltrated firms produces externalities on non-infiltrated companies, and show that banks do not reassess the overall credit risk in local markets.
- Subjects
ITALY; LAW enforcement; MAFIA; ORGANIZED crime; CREDIT risk; BANK loans; CREDIT control; CONFISCATIONS
- Publication
B.E. Journal of Economic Analysis & Policy, 2021, Vol 21, Issue 3, p1067
- ISSN
2194-6108
- Publication type
Article
- DOI
10.1515/bejeap-2020-0353