Abstract
This paper investigates the impact of China's 2018–2020 anti-Mafia campaign on the business environment. Using a novel dataset on organized crime prosecutions across China's prefecture-level cities and above, we find that the anti-Mafia campaign significantly improved the overall business environment. Probing the mechanisms, we show that the anti-Mafia policy enhanced the business environment through four key channels: increasing international trade and investment, bolstering domestic commercial activities, improving government effectiveness, and promoting public safety. Our findings pass a battery of robustness checks. We contribute to studies on organized crime economics and highlight the need for continued efforts to combat the Mafia.
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