Criminal infiltration in the legal economy: An empirical analysis of firms linked to organized crime

Organized crime increasingly exploits legitimate businesses to infiltrate the legal economy. While previous empirical research has mainly relied on confiscated firms and judicially identified cases, considerably less is known about firms identified through preventive administrative measures. This study investigates whether firms subject to anti-mafia injunctions differ systematically from comparable firms in terms of territorial, ownership, and governance characteristics. Using a novel dataset of 271 firms subject to anti-mafia injunctions issued in Lombardy and a matched sample of firms, we estimate logistic regression models. The findings show that territorial embeddedness is the strongest distinguishing characteristic of firms subject to anti-mafia injunctions. They also exhibit greater use of opaque corporate structures, whereas evidence for ownership and governance characteristics associated with nominee shareholders is less consistent. Overall, the results indicate that characteristics associated with organized crime are already observable before criminal involvement results in confiscation or other judicial measures.