Organized Crime and Productivity : Evidence from Firm-Level Data

In this paper we evaluate the effect of the presence of mafia organizations at local level through the estimation of a production function over a stratified sample of Italian firms. We find evidence of a negative impact on productivity, which is not significantly different between small and large firms, nor between industrial and services firms. As a consequence, even if some enterprises could suffer less directly from the pervasiveness of organized crime, its overall effects on the local economic and noneconomic system damage all of the firms, regardless of their size and sector