Mafia Infiltration and Ownership Dynamics in Italian Companies Amidst Covid-19



Presenter:
Tommaso Oliviero (University of Naples Federico II)

Coauthors:
Roberta De Luca (Bank of Italy)
Rosalia Greco (Bank of Italy)
Giovanni Immordino (University of Naples Federico II)


Abstract

We examine how Covid-19 social restrictions impacted the ownership structure of Italian private companies and probe the extent of mafia infiltration. We create a novel dataset of monthly ownership changes (shareholders' entries, exits, and reshuffles among existing ones), combined with information on government-mandated business closures and a mafia presence index for Italian provinces. In areas with higher pre-existing mafia infiltration levels, business closures increased the share of firms undergoing ownership changes, especially through the replacement of incumbent shareholders by new ones. Our main contribution is to shed light on the mechanisms through which the mafia infiltrates the economy during crises.