SSRN Electronic Journal · 2008 · 92 citations · 31 references
The study estimates how organized crime affects foreign direct investment inflows across 103 Italian provinces during 2004‑2006. Organized crime presence is measured with indicators of extortion, criminal association, attacks, and arson, and the analysis controls for investment incentives and other provincial factors. Results show that extortion and criminal association are significantly and negatively correlated with FDI, indicating that organized crime strongly deters foreign investors, especially in less developed provinces.
The paper estimates the effects of organized crime on FDI inflows in 103 Italian provinces in the period 2004-06. The presence of organized crime at a provincial level is quantified through several indicators, based on data for different kinds of crimes: extortion; association for criminal purposes, including mafia (Art. 416 and 416 bis of the Italian Penal Code); attacks; arson. Several control variables are used, included a proxy for (financial) investment incentives provided by public sectors. Estimation suggests that FDI inflows are influenced by different variables. Our results show that the extent of extortion and the number of persons denounced for "criminal association" are significantly and negatively correlated with FDI inflows. Finally, our analysis suggests the presence of organized crime is a strong disincentive for foreign investors, particularly in the less developed Italian provinces.
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Roger Koenker, Gilbert W. Bassett · Econometrica · 1978 · 12.3K citations
Strategic Supply Function Competition with Private Information
Xavier Vives · SSRN Electronic Journal · 2009 · 227 citations · Full text