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.