RESEARCH
RESEARCH
In an environment of economic development, organized crime is one of the most pressing economic problems. In fact, the presence of criminal organizations, which aggravate the other factors of inefficiency, contributes to the regional heterogeneity of the Italian economy.
MILESTONES
MILESTONE 1
Create a composite crime indicator based on three profiles of how illegal activity affects business efficiency.
MILESTONE 2
Analyse the impact of organised crime on the technical efficiency of enterprises through the use of econometric techniques.
MILESTONE 3
Investigate potential channels through which illegal activities hamper business performance.
RESEARCH ACTIVITY
The aim of this research project is to conduct an in-depth analysis of the impact of organized crime on the technical efficiency of enterprises.
The first milestone of the project aims to create a composite indicator of organized crime based on three profiles of how illegal activity affects business efficiency. Specifically, the three perceived risk profiles related to the presence of organized crime are observed through a questionnaire conducted by the Bank of Italy. Companies were asked what they perceived as the risk of: threats, intimidation or attempts to extort; offering to sell their business on unusual terms; obtaining a loan outside official channels.
The second milestone of the project involves the application of advanced econometric techniques based on parametric and non-parametric methodologies to assess the impact of crime indicators (both composite and individual profile) on the technical efficiency of enterprises, both on the added value and cost side.
The third milestone of the project is to investigate potential channels through which illegal activities hamper business performance. An unfavourable social environment should lead managers to follow a prudent strategy that stifles the propensity of the enterprise for innovation. The correlation between R&D expenditure and the indicator estimated in the first phase of the project will therefore be established.
The potential economic and social consequences would be undeniable. In fact, to determine whether and how organized crime is a factor of business inefficiency, as well as to assess the potential threats to the innovative capacity of enterprises, could indicate the best way to increase legal protection and avoid recourse to unofficial credit providers, thus reducing economic and social costs at company and national level. As a result, the results of the research will be particularly relevant to policy-makers, practitioners and academics worldwide, as organized crime affects both developing and developed countries.