Resisting the extortion racket: an empirical analysis
While the contributions on the organized crime and Mafia environments are many, there is a lack of empirical evidence on the firm’s decision to resist to extortion. Our case study is based on Addiopizzo, an NGO that, from 2004, invites firms to refuse requests from the local Mafia and to join a public list of “non-payers”. The research is based on a dataset obtained linking the current administrative archives maintained by the chambers of commerce and the list updated by the NGO. The objective of this paper is twofold: first, to gather sound data on the characteristics of the Addiopizzo joiners; second to model the probability to join Addiopizzo by a two-level logistic regression model. We find that the resilience behavior is likely to be the result of both individual (firm) and environmental factors. In particular, we find that firm’s total assets, firm’s age and being in the construction sector are negatively correlated with the probability of joining AP, while a higher level of human capital embodied in the firm and a higher number of employees are positively correlated. Among the district-level variables, we find that the share of district’s population is negatively correlated with the probability to join, while a higher level of socio-economic development, including education levels, are positively correlated.
KeywordsOrganized crime Extortion Social mobilization Multilevel regression models
JEL ClassificationO17 K42 R11 C41
We are grateful to Addiopizzo for providing data and for support to this research. We wish to thank in particular Caterina Alfano, Daniele Marannano, Giuseppe Pecoraro and Pico di Trapani. We also thank the Chamber of Commerce of Palermo, the Istat office of Palermo (in particular Dott. Li Vecchi), the Ufficio Toponomastica of Palermo City Council (in particular Dott. Salamone); Matteo Zucca and Marcella Milillo for help with the data; Luigi Balletta, seminar participants in Livorno (Structural Change, Dynamics and Economic Growth), Pisa, Petralia (VII Applied Economics Workshop), and Naples (Old and New Forms of Organised and Serious Crime.) and four anonymous referees for comments. Gabriele Mellia, Alice Rizzuti and Giorgio Tortorici provided excellent research assistance. Financial support from MIUR (PRIN 2009, “Structural Change and Growth”), and University of Palermo (FFR 2012), is gratefully acknowledged. Usual caveat applies.
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