An empirical analysis of organized crime, corruption and economic growth

In a companion study, Blackburn et al. (Econ Theory Bull, 2017), we have developed a theoretical framework for studying interactions between organized crime and corruption, with the view of examining the combined effects of these phenomena on economic growth. The analysis therein illustrates that organized crime has a negative effect on growth, but that the magnitude of the effect may be either enhanced or mitigated in the presence of corruption. In this paper we tackle the ambiguity produced by the coexistence of the two illicit activities with an empirical investigation using a panel of Italian regions for the period 1983–2009. We find that organized crime distorts growth less when it coexists with corruption and show our results to be robust to different specifications, measures of organized crime, and estimation techniques

Exporting and labor demand : micro-level evidence from Germany

It is widely believed that globalization affcts the extent of employment and wage responses to economic shocks. To provide evidence for this, we analyze the effect of firms' exporting behavior on the elasticity of labor demand. Using rich, German administrative linked employer-employee panel data from 1996 to 2008, we explicitly control for self-selection into exporting and endogeneity concerns. In line with our theoretical model, we find that exporting at both the intensive and extensive margins significantly increases the (absolute value of the) unconditional own-wage labor demand elasticity. This is not only true for the average worker, but also for different skill groups. For the median firm, the elasticity is three-quarters higher when comparing exporting to nonexporting firms

Patterns of Crime Victimization in Latin America

In this paper we draw a profile of the victims of crime in Latin America. We show that- at least for the case of property crime - the typical victims of crime in Latin America come from rich and middle class households and tend to live in larger cities. We also show that households living in cities experiencing rapid population growth are more likely to be victimized than households living in cities with stable populations. We offer various explanations to these facts, and while we cannot yet provide definite answers to some of the questions raised by this paper, we are at least able to reject some plausible hypotheses. On the whole, our results imply that urban crime in Latin America is, to an important extent, a reflection of the inability of many cities in the region to keep up with the increasing demands for public safety brought about by a hasty and disorderly urbanization process

The Evolution of Urban Concentration Around the World: A Panel Approach

In this paper, we use a panel approach to study population growth in major cities around the world. We find that major cities grow faster in relatively backward economies and in more volatile, faster-growing economies. We also find that the effects of trade policy on the growth of major cities hinge heavily on geography. While population growth in major cities located at or near ports does not change after an upsurge of trade flows, population growth in landlocked major cities tends to slow down after the same event. On the other hand, we do not find any effect of political regime on the population growth of major cities. Finally, we find some evidence that, other things being equal, larger cities tend to grow at smaller rates

Starting-up unregistered and firm performance in Turkey

© 2016 The Author(s) Recent years have seen a questioning of the negative representation of informal sector entrepreneurship and an emergent view that it may offer significant benefits. This paper advances this rethinking by evaluating the relationship between business registration and future firm performance. Until now, the assumption has been that starting-up unregistered is linked to weaker firm performance. Using World Bank Enterprise Survey data on 2494 formal enterprises in Turkey, and controlling for other determinants of firm performance as well as the endogeneity of the registration decision, the finding is that formal enterprises that started-up unregistered and spent longer unregistered have significantly higher subsequent annual sales and productivity growth rates compared with those registered from the outset. This is argued to be because in such weak institutional environments, the advantages of registering from the outset are outweighed by the benefits of deferring business registration and the low risks of detection and punishment. The resultant implication is that there is a need to shift away from the conventional eradication approach based on the negative depiction of informal entrepreneurship as poorly performing, and towards a more facilitating approach that improves the benefits of business registration and tackles the systemic formal institutional deficiencies that lead entrepreneurs to decide to delay the registration of their ventures

Ethnic entrepreneurs and online home-based businesses: an exploratory study

This exploratory, qualitative study considers how online home-based businesses offer opportunities for ethnic entrepreneurs to ‘break out’ of traditional highly competitive and low margin sectors. Previous studies have found a positive association between ethnic minorities’ high levels of entrepreneurship and home computer use in ethnic groups. Despite these associations, previous studies have overlooked the particular opportunities offered by home-based online businesses to ethnic entrepreneurs. The study adopts mixed embeddedness as a theoretical lens to guide interviews with 22 ethnic entrepreneurs who have started online home-based businesses in the UK. We find online home-based businesses offer ethnic entrepreneurs novel opportunities to draw on their ethnic advantages and address the constraints they face. The unique affordances of this type of business allow entrepreneurs to develop the necessary IT skills by self-learning and experimentation and to sub-contract more difficult or time consuming aspects to others. The findings also show that, consistent with the theory of mixed embeddedness, whilst the entrepreneurs are influenced by social, economic and institutional forces, online businesses allow them to exert their own agency and provide opportunities to uniquely shape these forces