Vincenzo Sessa (University of Salerno)
This analysis examines the indirect effects of a mafia firms entry into receivership on neighboring firms (within a 10-km radius) operating in the same macro sector. Judicial admin istration is an intervention aimed at disrupting links between the mafia and the legal economy without altering market competition. Through an event study and dynamic diff-in-diff applied to a panel of 46,254 firms in Southern Italy, observed from 2006 to 2023, we find a decline in revenues (-2.24 percent per unit of treatment) and employment (-2.05 percent per unit of treatment) in the first three years after the measure. These results highlight how criminal organizations not only infiltrate the legal economy but also become an integral part of it, profoundly affecting the stability and functioning of the local market.