Description:

Speaker: Elena Stella

Title: Organised Crime and Firms: the Value of Signalling Good Behaviour

Abstract: This paper studies how asymmetric information about firms affiliation to organised crime impacts their performance, ability to raise capital and participation in public procurement. I exploit an Italian reform that introduces local police investigations into all firms wanting to participate in public procurement. I hand collect firm level information from 12 provincial police offices and match them with public tender and balance sheet data. Preliminary results suggest that firms undergoing the investigation improve their performance, increase their leverage and win more public contracts.