This paper examines how firms in an emerging economy are affected by violence due to drug trafficking. Employing rich longitudinal plant-level data covering all of Mexico from 2005–2010, and using an instrumental variable strategy that exploits plausibly exogenous spatiotemporal variation in...

We show that the War on Drugs launched by the Mexican President Felipe Calderón in 2007 pushed drug cartels into large-scale oil thefts. Municipalities that the presidential candidate’s party barely won at the local elections in 2007-2009 exhibit a larger increase in illegal oil taps over the...

Mexico has experienced a dramatic increase in violence during the last decade. This increase has been associated with turf wars among Drug Trafficking Organisations (DTOs) for the control of strategic territories. This paper examines whether these territorial disputes are higher during the lame...

Violence in Mexico has reached unprecedented levels in recent times. After the government began a crackdown on drug cartels, nation-wide homicides almost tripled between 2006 and 2010. Using rich longitudinal plant-level data, this paper studies the impact of violent conflict on firms,...

When does organized crime resort to assassinating politicians? In narcocracies, criminal groups co-opt political elites through bribery in exchange for protection to traffic illegal drugs. When criminal groups compete, they may also resort to political violence to influence which candidate wins...

The standard economic model of police stops implies that the contraband hit rate should rise when the number of stops or searches per officer falls, ceteris paribus. We provide empirical corroboration of such optimizing models of police behavior by examining changes in stops and frisks around...

Do investors anticipate that demands for racial equity will impact companies? We explore this question in the context of the Black Lives Matter (BLM) movement--the largest racially motivated protest movement in U.S. history--and its effect on the U.S. policing industry using a novel dataset on...

We study the implications of police discretion for public safety. Highway patrol officers exercise discretion over fines by deviating from statutory fine rules. Relying on variation across officers in this discretionary behavior, we find that harsher sanctions reduce future traffic offending and...