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IMAGE: New research unveils that firms connected to organized crime have lower return on assets, higher debt, lower cash holdings and are more likely to default. view more
Credit: Paolo Tonato
New research from Bocconi University in Milan highlights that, contrary to received wisdom, connections to organized crime harm a company s financial performance and increase by 25.5% its likelihood to go bust.
Using a novel dataset from AISI, the Italian Internal Intelligence and Security agency, Bocconi professors Antonio Marra, Donato Masciandaro, and Nicola Pecchiari in a paper co-authored with Pietro Bianchi (Florida International University) published online in
The Accounting Review, identify 1,840 criminally connected firms headquartered in Italy s Lombardy region.