DP12140 Industrial Clusters, Organized Crime and Productivity Growth in Italian SMEs
| Author(s): | Roberto Ganau, Andrés Rodríguez-Pose |
| Publication Date: | July 2017 |
| Keyword(s): | externalities, Industrial clustering, Italy, organized crime, total factor productivity |
| JEL(s): | D24, L25, R11, R12 |
| Programme Areas: | International Trade and Regional Economics |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=12140 |
We examine whether organized crime affects firms' performance (defined using Total Factor Productivity growth) both directly and indirectly, by downsizing the positive externalities arising from the geographic concentration of (intra- and inter-industry) market-related firms. The analysis uses a large sample of Italian small- and medium-sized manufacturing firms over the period 2010-2013. The results highlight the negative direct effects of organized crime on firms' productivity growth. Any positive effect derived from industrial clustering is thoroughly debilitated by a strong presence of organized crime, and the negative moderation effect of organized crime on productivity growth is greater for smaller than for larger firms.