Local Small Business Research Articles

Effects of COVID-19 on Local Small Businesses and Resiliency Options in South Wollo and Oromia Administration Zone, Ethiopia

Unemployment is rising in Africa due to inefficient economic performance; rural –urban migration as well as the speeding up poverty. Ethiopia is not exceptional in facing by such daunting unemployment and poverty and its resultant effect at both the rural and urban areas. Government envisaged and implemented national economic policies and programs, for instance, micro and small enterprise and technical and vocational training programs that boost local and small business growth in the urban areas. Micro and small enterprise particularly local and small business activities created vast job opportunities in cities in Amhara regional state, specific to South Wollo and Oromiya administration Zone, Ethiopia. However, local and small business were in fact triggered and faced by adverse factors, COVID-19 was prevalently affecting their monthly sale, saving, expenditure and overall activities. Along with this, this study pinpointed the effect of COVID-19 on the local and small businesses activities in Kemissie, Dessie, Kombolecha and Haik. In pursuit of it, this study employed a descriptive type of research design using cross sectional surveyed data. In pursuit of this, binary logistic regression model and stata software 14 version was used to determine significant effect of COVID-19 on local and small business. Along with this, this study, identified that COVID-19 was influenced the local and small business owner’s income; saving and expenditure. Moreover, lack of loan without collateral and working area were significantly affecting local and small business activities besides to the COVID-19 lockdown. This, study, therefore, suggest to whom it may concern to subsidies and deliver loan without collateral; entrepreneurial and client handling training, working areas for local and small business that will have help of resilienting from the effect of COVID-19 pandemic and the rising inflation effect in the study area and at large in Amhara region, Ethiopia.

Brand Promotion Strategy in the Internet Services Market

Digital technologies have become an integral part of modern life, the Internet services market is rapidly developing all over the world, which requires business companies to enter cyberspace. Staying on the Internet has long been an obligatory part of the business not only for large multinational companies but also for small regional and local business structures. It is not just the presence of a website or a group in social networks that is important, a brand communication strategy is necessary. The relevance of the studied subject is due to the need to increase the competitiveness of Ukrainian companies in the field of Internet marketing. The purpose of the article is to develop standard recommendations for strategic brand promotion in the Internet services market, to study the most effective promotion tools and communication channels with the audience in cyberspace. The leading methods for studying the problem were sociological and statistical methods. The technologies of system analysis and modeling are applied. The article analyses the best international and industry branding practices in cyberspace, examines the e-commerce market in Ukraine, and structures the main trends in its development. The material of the article formulates the mechanism for developing and introducing a brand positioning strategy in the e-commerce market, the main characteristics of successful branding, structures recommendations for the use of marketing technologies on the Internet. An important component of the research is the analysis of digital marketing tools and communication channels in the Internet services market. The materials of the article are of practical importance for the business community, specialists in the field of public relations, marketing, advertising, sales departments, and other specialists in the field of management. Effective brand management of Internet services allows increasing the commercial results of one's business, provides additional competitive advantages

Speak Global, Sell Local? Digital Linguistic Landscape of Local Small Businesses in the Social Media

AbstractThis paper focuses on the online presence of languages and linguistic patterns of local small businesses in a bilingual, Hungarian-Romanian ethnic community in Romania. By capturing linguistic diversity and creativity via netnographic research, patterns of linguistic landscape elements in the social media, such as marketing strategy of local small businesses, can be analysed. The findings suggest that despite the need to advertise by using the state language, Romanian, in order to maximize the target audience, the concentration of Hungarian landscape elements is the highest. Businesses construct their linguistic identity by their language choices and practices, aligned with the collective linguistic identity of a bilingual community and the need for a global representation, in order to secure a place in the local market.

Insights from sentiment analysis to leverage local tourism business in restaurants

PurposeSocial media has become the main venue for users to express their opinions and feelings, generating a vast number of available and valuable data to be scrutinized by researchers and marketers. This paper aims to extend previous studies analyzing social media reviews through text mining and sentiment analysis to provide useful recommendations for management in the restaurant industry.Design/methodology/approachThe Lexalytics, a text mining artificial intelligence tool, is applied to analyze the text of the online reviews of the restaurants in a touristic Dutch village extracted from the most frequently used social media platforms focusing on the four restaurant quality factors, namely, food and beverage, service, atmosphere and value.FindingsThe findings of this research are presented by the identified key themes with comparisons of the customers’ review sentiment between a selected restaurant, Zwaantje, vis-à-vis its bench-mark restaurants set by a specific approach under the abovementioned quality dimensions, in which the food and beverage and service are the most commented by customers. Results demonstrate that text mining can generate insights from different aspects and that the proposed approach is valuable to restaurant management.Originality/valueThe paper provides a relatively big scale in numbers and resources of social media reviews to further explore the most important service dimensions in the restaurant industry in a specific tourist area. It also offers a useful framework to apply the text mining business intelligence tool by comparison of peers for local small business restaurant practitioners to improve their management skills beyond manually reading social media reviews.

Striving for a new normal after the Covid-19 pandemic: taking small businesses at Bangsaen Beach as an example

ABSTRACT The Covid-19 pandemic interrupted Bangsaen Beach activities and disturbed livelihoods of small business operators. Before the pandemic, Bangsaen tourism experienced issues of beach quality degradation due to overcrowding, competitive vending, and lack of diversification. After the pandemic, the municipality imposed new regulations, reset zones to safeguard the public health, and jump-started the economy. The changing regulations created conflicts with vendors on zoning rearrangements and reduced sales. The author conducted a survey to investigate the beach activities, the local small business operations, and the local authority’s regulation changes. The survey results indicated that Bangsaen needs alternative attractions to complement its beach activities and to help cope with traffic congestion. The results also find out the social disparity in the demography of the vendors, which calls for attention to gender aspects and inclusive facets in the social infrastructure development strategy. This study suggests that vendors collaborate collectively with the local government to challenge the appropriation of beach spaces and to create innovative tactics. In addition, destination management organizations need to strive for better collaboration with small business operators to help them adapt to the change and enter the formal economy.

MARKETING SUBSTANTIATION, ORGANIZATIONAL AND ECONOMIC CHARACTERISTICS OF SMALL BUSINESS IN THE PROVISION OF HOTEL SERVICES

Abstract. The article proposes a business model for the development of small business in the regional market of services in Ukraine on a generalized methodological approach; the main aspects and parameters of development of hotel services are revealed. The main purpose of the research is to develop a methodological approach to marketing substantiation, organizational and economic characteristics and management of a small business to provide hotel services on the example of a hostel. Systematization of literature sources and approaches to solving the problem of using strategic management for local small businesses indicates the need to develop a universal business model for the development of hospitality services, taking into account the characteristics of the regional market and other important factors. After all, thanks to a well-chosen for a specific time and a specific market environment, the business models of the company achieve a stable competitive advantage. The rapidity of market changes in the economy of Ukraine and the spread of entrepreneurship actualize the creation of effective algorithms and methods of approach to marketing justification and strategic management of small businesses. The object of research is the business model of future business in terms of implementing a business idea for the local market. The research was carried out using modern general scientific and special methods: business idea map, PEST-analysis, Osterwalder’s business model, determination of business value by cost, income and market approaches, sensitivity analysis to determine the degree of business risk. The information base of research consisted of statistical and organizational, financial reporting of small businesses for the provision of hotel services. As a result of the research, an algorithm for opening and analyzing the work of small businesses to provide hotel services on the example of a hostel was developed. The methodical approach consists of stages: development of a map of a commercial idea; analysis of a potential commercial idea and problems that can be solved in the case of implementation of this commercial idea; consolidated PEST analysis; description of the model of consumer service behavior of hotel services; analysis of project business competitors; drafting a practical philosophy of small business; drawing up a business model of a small project enterprise; resource substantiation; project risk assessment. The proposed methodological approach can be applied to develop a business plan for small business opening a hostel for the development of the regional market of services. Keywords: business plan, marketing plan, card of the business idea, degree of risk of business, hostel, outline of Osterwalder’s business model, PEST analysis. JEL Classification M31, М21, R15, R30 Formulas: 0; fig.: 1; tabl.: 6; bibl.: 23.

PROGRAMA AGENTES LOCAIS DE INOVAÇÃO: UM ESTUDO DE CASO DE CARACTERIZAÇÃO E RESULTADOS EM BOA VISTA (RR)

The Local Innovation Agents Program (ALI) is a relevant extension initiative developed in an inter-institutional coordination in order to promote innovation in small Brazilian businesses through the operationalization of the Brazilian Micro and Small Business Support Service (SEBRAE) and funding from the National Council Scientific and Technological Development (CNPq). Structured through a case study with the application of a semi-structured survey to a sample of 25 small companies in a universe of 40 in the data collection, combined with a graphic analysis and an administrative hermeneutics in the data analysis, this research has an exploratory and descriptive nature regarding to the purposes and quali-quantitative nature regarding the means. Based on the results presented it is concluded that the implementation of the Local Innovation Agents Program (ALI) has had positive indicators in the promotion of innovation in local small business in the municipality of Boa Vista in Roraima as well as shared by the perception of the businessmen served.

COMMUNITY-BASED TOURISM AS A SUSTAINABLE SCHEME? HIDDEN PARADOX FROM THE CASE STUDY IN THUYBIEU WARD, HUE CITY

Community-based tourism (CBT) emerged as a form of anti-mass tourism because of its economic, social, and environmental benefits. This study examines whether CBT is faithful to those promises in reality. The research was carried out in Thuybieu ward, which is considered a famous CBT destination in Hue city, central Vietnam. By using the interpretive approach and qualitative methods, the results show that CBT started in the 2010s with the participation of small local groups and business startups. CBT then rapidly developed with the involvement and over control from private outsiders, resulting in elite capture, non-authenticity issues, and imbalance in benefit-sharing. The results also shed light on the truth that business agencies called for the community’s participation under the guise of sustainable development and community benefits that lead to risks for the community themself and changed the nature of CBT theory. Recognizing this, the study proposes policy implications towards a more sustainable and equitable development in the context of CBT.

THE MECHANISM OF STATE SUPPORT FOR SMALL BUSINESS DEVELOPMENT: SYNERGISTIC ASPECTS

The purpose of this research is the development of theoretical foundations for the functioning of the mechanism of state support for small business in a decentralized government based on a synergistic approach. The subject of the study: theoretical and methodological foundations for the functioning of the mechanism of state support of small business in the context of synergetics. Research methodology is a set of principles, approaches, general theoretical, special, and interdisciplinary methods of scientific knowledge, namely morphological analysis, comparative analysis, methods of deduction and logical generalization, analysis and synthesis. Functioning of the mechanism of state support for small business is considered on the basis of a synergistic approach. The synergistic approach is one of the most effective methodological bases for the development of modern economics. The article considers the key theoretical provisions for understanding this approach, substantiates the possibility and feasibility of its application in the implementation of this mechanism in modern economic conditions. Results. It is determined that the reform of decentralization of power has led to the creation of institutional problems in the economic mechanism of state support for small business. In the regions and territorial communities, there is no single mechanism to support the development of small business, which causes the inefficiency of this area of public policy. This justifies the relevance of the use of new methodological approaches to the formation of the mechanisms for implementing the state policy of business regulation. The importance of small business for the development of the national economy, ensuring its stability, is substantiated, the main approaches to the essence of entrepreneurship are investigated. Theoretical aspects of the functioning of the mechanism of state support for small business on the basis of traditional and systemic approaches are systematized, their positive aspects and shortcomings are determined. It is substantiated that in the conditions of economic transformations and introduction of the reform of decentralization of power it is expedient to use the synergistic approach in the research of the mechanism of the state support of the small business. It is emphasized that the very synergistic approach is able to study the process of functioning of the mechanism of state support for small business on the basis of evolutionary development and self-organization of complex systems. We propose to consider the mechanism of state support in the conditions of decentralization as a process of self-organization of small business entities and public authorities, which is carried out through their interaction with the meso- and macroenvironment. Conceptual bases of the use of the synergistic approach in the research of the mechanism of the state support for the development of entrepreneurship and its economic levers are developed. It is substantiated that the application of a synergistic approach in the process of formation and application of the mechanism of state support of small business will allow to take into account interdependence of economic processes and phenomena, to investigate the interaction of local authorities and small businesses under decentralization. The use of a synergistic approach as a research method also makes it possible to take into account the dynamics of the state support mechanism. The synergistic methodology in the study of the mechanism of state support for small business allows to take into account the existence of connections and interactions between the components of the mechanism, as well as the integrity and ability to change. Based on a synergistic approach, it becomes possible to ensure the development of small businesses by preventing threats. The next advantage is the ability to take into account the alternative scenarios of small business development of a particular region or territory in a changing socio-economic environment. Consideration of the mechanism of state support as a self-organized system makes it possible to study the patterns of self-organization, which in the future should become the basis for calculating the synergistic effect of the mechanism.

Framing Good Food: Communicating Value of Community Food Initiatives in the Midst of a Food Crisis

Community-embedded food initiatives exist in market economies, but make more-than-market contributions. They challenge the dominant, industrialized food system, while generating non-monetary benefits in their communities. Yet food policy, regulation, and public spending in much of the world is still framed by the values of market economy. Revenue, yield, and technological advancements remain key formal measurements of the wellbeing of food systems. Community-embedded food initiatives like small local businesses and non-profit organizations, are often committed to advancing social and environmental benefits of non-industrialized food, and they call for clearer recognition of their more-than-market contribution to community wellbeing. The Nourishing Communities network has worked with such initiatives for more than a decade, undertaking community-engaged research with practitioners across sectors. The network has found that these initiatives are impeded by a communication conundrum. On the one hand, they are expected (by funders, governments, and other institutions) to demonstrate their value using market-economy measurements and translating what they do into “social returns on investment.” On the other hand, many of those initiatives need non-market terminology to express the values that they espouse and generate. To balance these needs, Gibson-Graham’s framing of “diverse economies” can potentially offer a pathway to better communication and thus more accurate valuing of the work of such initiatives. Their notion of diverse economies offers endless opportunities to frame community food work as valuable in ways that go beyond market-economy measurements. As such, the diverse economies framing offers new possibilities for alternative food, and for more general discussions of social reform.

An interview with Romira Young: opportunities and challenges for local small business owners in the tourism and hospitality industries in times of disaster

PurposeThe purpose of this interview aims to offer a means to better understand tourism as it relates to small businesses within a global network.Design/methodology/approachA semi-structured interview was used.FindingsThe key findings are in line with Masco’s (2017) research that asserts “change can be selective and/or optional for the tourism stakeholders (e.g. tourists, operators, destination organizations, policymakers, local communities, employees), the nature and degree of crises-led transformations depend on whether and how these stakeholders are affected by, respond to, recover and reflect on crises”, particularly small minority-owned tourist companies.Practical implicationsThis interview provides a lens to better understand how small businesses operate within the global market and remain at the cornerstone for sustaining domestic and international markets.Originality/valueThis study highlights small minority-owned business and their ability to become resilient. This interview illustrated that grounded small businesses, while implored with challenges from natural disasters, also have the resiliency to overcome such challenges when the agency has the ability to provide “turn-key” services for their clients thereby providing clients a sense of agency and value-laden experiences via personalization of services.

Mapping social media analytics for small business: A case study of business analytics

ABSTRACT The purpose of this study is to develop a guideline/map for small businesses to effectively utilise social media analytics and to create appropriate strategies through an examination of Key Performance Indicators with the business analytics process (Strategy-making map). Also, the researcher examines the new sequential relationships among business analytics types, the role of human analysts in business analytics, and the reciprocal relationships among the social media marketing goals. This is a case study with a local small business’s social media analytics provided by a social media network platform (i.e., Facebook Insights). The map visualises how to interpret the KPIs and how to create effective marketing strategies based on the organisational decision-making model. The results supported that if a business could create a winning strategy based on accurate business analytics with human analysts, the business could achieve multiple social media goals at once with a single marketing strategy.

Competitive factors between local and foreign national small business retailers in South Africa: The case of Cape Town’s Townships

This paper is based on the study that sought to identify the core competitive factors that differentiate foreign national small business retailers from local South African small business retailers in the way they operate their small retailing businesses. Primary research was conducted in two of Cape Town’s (South Africa) townships, Delft and Eindhoven. The population of the study comprised two groups, namely, South African and foreign national small business retailers operating grocery retailer stores. The first group consisted of 55 South African small business retailers while the second group consisted of 75 migrant small business retailers. A random sample was targeted from each group and the quantitative research methodology was used in this study using a structured questionnaire with close-ended questions. The results showed growth of foreign national retailers and decline in the number of the local retailers in the two townships. The study showed that migrant retailers have a competitive edge over local retailers. The study also revealed that most local traders have a lower level of education compared to their migrant trader counterparts. Furthermore, the study revealed that most of local small business retailers have never had a business finance mentor in their entire trading life. The study revealed that there is a need for a targeted funding model for potential and current local small business retailers. The study proposes a three-stage business intervention model to assist South African small business retailers to become more competitive in township retailing environments.

A Study On The Relationship Between Exhibition Experience And Behavioral Intention, And The Mediating Effect Of Satisfaction And Brand Assets In Corporate Promotion Exhibition Halls

Currently, Korean companies operate corporate promotion halls, memorial halls and museums, centering on large corporations, making them a place for long-term communication beyond the short-term contact with consumers. In addition, companies have provided recently virtual exhibition experiences through the homepage or apps to the corporate publicity exhibition halls, which are operated by the company, and are being developed in parallel with the existing exhibition experiences. Therefore, this study conducted an empirical analysis to find out the effect of the exhibit experience of the corporate publicity exhibition hall on the consumer behavioral intention with the subject of the visitors who have experienced the exhibition experience of the domestic corporate publicity exhibition hall. Followings are the implications for the results. First, the corporate publicity exhibition hall did not have a specific effect on the behavioral intention of customers simply by exhibiting and viewing. This indicates that companies that operate or prepare to open the corporate publicity exhibition hall should avoid such simple experiences or simple viewing facilities. Second, the corporate publicity exhibition hall cannot induce customers' behavior simply by exhibiting experiences. The results will be more efficient when the corporate publicity exhibition hall is operated in combination with the brand assets of the company presented in this study or tangible and intangible assets of other companies. Third, as derived from the results of the study, corporate product brands are boldly exposed to consumers and very sensitive to consumers, affecting their behavioral intentions. The positive image of a product brand will lead to satisfaction and behavioral intentions, which in turn will affect the company's sales growth. Therefore companies should be very careful in managing their product brand. The academic significance of this study is in that it investigated the relationship between satisfaction, brand assets, and behavioral intention through the exhibition experience in the corporate publicity exhibition hall by conducting empirical analysis of the relationship systematically. In addition, it is expected to be used as a practical basic material that can be more practical in producing exhibition experiences when newly opening a corporate publicity exhibition hall or remodeling an existing corporate publicity exhibition hall. In the follow-up study, in order to provide the best exhibition experience to visitors to a company publicity exhibition hall, various variables such as human and material elements of the company publicity exhibition hall, such as how to guide at an information desk, the contact point with customers as well as four elements of experience. In addition, it will have its own meaning if research is conducted on local small and medium-sized businesses in addition to the corporate publicity exhibition hall centered on large companies.

Professional education: current condition and new approaches

The article deals with the problems of professional education at the current stage of national economy’s development. The authors attract attention to the difference between the approaches to improving secondary and higher professional education. Government agencies of the highest level focus on improving the system of higher education and labour force training, but training of mid-level specialists has recently fallen out of their sight. Lately a great number of colleges have become part of higher educational institutions. However, during the latest reorganization of the Ministry of Education and Science, which resulted in foundation of the Ministry of Education, secondary professional education fell under the jurisdiction of the latter. The authors suggest uniting secondary and higher professional education into one single system and consider that as higher education. Line engineers will be trained at colleges (even on the basis of basic general education) but probably the term of training will be a little longer due to the fact that colleges are expected to be part of the university structure. Such educational programs could be implemented in regional branches of head universities to provide local industries, small and medium businesses with skilled workforce. The practice of students’ training proved that the division of Bachelors’ and Masters’ competences by the type of their future job is senseless as students do not determine their preferences for future occupation during the period of their studies. The authors suggest developing generalized competence models of graduates. The models could be used to formulate the requirements to the graduates with different level of education. Graduates with professional education will receive diploma together with a supplement containing the list of competences obtained. New Federal State Educational Systems of all levels of higher education read that professional competences are established by an educational institution itself. Therefore, the authors suggest considering issuing university diplomas instead of those of state educational standard.

The Impact of COVID-19 Pandemic: A Closer Look at the Night Market Traders’ Experience in Penang, Malaysia

The COVID-19 pandemic which spread around the world evidently has impacted various sectors in Malaysia including the economic sector. Many that profoundly affected by this ongoing pandemic are small local business owners, such as night market traders. Therefore, this study aims to identify the problems as well as the impacts faced by the night market traders in Penang during the pandemic. A total of 15 informants were recruited to engage in an in-depth interview by purposive sampling. Findings indicate that there is a drop in sales and profits for a significant number of informants. The problems that have been identified are the reopening status and diversion of night market location, the increase of night market site rental fee and essential items price for business, lacking of marketing promotion by organisers have made the public unaware of the night market reopening status, issues related to standard operating procedure (SOP) as well as acceptance of government assistance initiative. Even though online sales platform has become a popular alternative by a large number of informants throughout the pandemic, the return and profit received have not reached a good proportion. All in all, the COVID-19 pandemic has produced various daunting problems that have had multiple impacts on night market traders. Restructuring or remodeling of business strategies should be done by the night market traders to adjust to the new norm as advocated by the government, as well as to minimize the risk of profit loss.

Small Local versus Non-Local: Examining the Relationship between Locally Owned Small Businesses and Spatial Patterns of Crime

In the current study, we theorized that businesses in place are subject to two processes: a crime generator effect in which they heighten crime due to increased opportunities and a crime inhibition effect in which certain types of businesses can increase guardianship capability. We explicitly compare the different effects of local vs. non-local and small vs. large businesses on crime in street segments using the data in cities across the Los Angeles metropolitan region by estimating a set of negative binomial regression models for small local, large local, small non-local, and large non-local consumer facing businesses (Retail, Restaurants, Food/Drug Stores, and Services) for violent and property crime. Although we found that most of the business coefficients were positive, local businesses, and particularly small local businesses, have considerably smaller crime-enhancing effects for both violent and property crime.

How Did Differences in COVID-19 Responses by Texas & New York Governments Affect Businesses in Each Respective State?

During the COVID-19 pandemic, each state dealt with the pandemic in different ways. At the two ends of the strictness spectrum of containment policies are New York and Texas, which had very different ways of dealing with the COVID-19. Much literature has been published comparing COVID-19 government policies across states, many of which acknowledge the dramatic difference between that of New York and Texas. This study provides further insight into the effects of these different policies on the businesses in each state by directly reaching out to said businesses to gather and analyze empirical data. This study had two branches of data collection. The first branch consisted of gathering public data from government sources. The second branch consisted of survey data from small local businesses. The public data, which focused on predictors such as the unemployment rate and SNAP benefits, painted a broad picture of each state’s economic situation and government involvement. The survey data provided insight into the experiences of businesses within their respective economies. T-tests were run for both branches of data to determine significant differences between states for each predictor or experience. The public data and the survey data were then compared to see if the experiences of businesses matched the overall economic situation of each state. Not only will this study provide further insight into how these different policies affected business in each state, but it will also provide insight into the motivations behind the different policies, such as why a state would prioritize their economy over gaining control of the COVID-19 virus.

Стейкхолдеры региональной экологической политики в России

Abstract Introduction: it is considered that the stakeholders participation in the decision- making process increases their efficiency and effectiveness; however, in the context of studying Russian regional environmental policy, the issue of identification, interests and main directions of interaction between key actors and stakeholders remains under-examined. Objectives: identifying directions and possible forms of cooperation between stakeholders and subjects of Russian regional environmental policy. Methods: classification method. Results: the key stakeholders of Russian regional environmental policy are revealed; the powers of regional authorities in the field of environmental protection are established; the main directions and possible forms of cooperation between stakeholders and subjects of Russian regional environmental policy are specified. Conclusions: there are four key groups of stakeholders that influence the decision-making process in the framework of regional environmental policy (federal government and local authorities, civil society, small, medium and large businesses and universities). Based on the analysis of the regional authorities’ powers, six directionsof cooperation between stakeholders and subjects of Russian regional environmental policy are identified. The most relevant direction for all stakeholders is to ensure environmentally safe waste management; it allows attracting the maximum number of participants and doesn’t require serious financial investments, but mainly only initiative. Possible forms of cooperation between stakeholders and subjects of Russian regional environmental policy are presented for each direction.

Cyberattacks on Small Banks and the Impact on Local Banking Markets

Small banks are targets of a large number of cyberattacks. Using a sized-matched difference-in-differences design, we document that successful cyberattacks decrease branch deposit growth rates at small US banks. This decrease is due to bank-specific reputational damages that erode the trust of bank customers. The loss of trust results in a reallocation of deposits within local banking market to large banks. The reallocation is the consequence of a “flight-to-reputation” by depositors since it favours primarily large banks with a high reputation. We next document that cyberattacks affect the relationships between banks and customers in mortgage markets wherein hacked banks attract riskier applicants and are forced to lower their credit standards. Ultimately, our results imply that cybersecurity investments are crucial for banks to attract and retain customers and indicate that financial constraints in small banks can lead to local banking markets increasingly dominated by large banks. We highlight how this change in market structure can affect access to credit of small local businesses and impede the development of local economies.