IDEAS home Printed from https://ideas.repec.org/a/taf/ujbmxx/v63y2025i4p1695-1720.html
   My bibliography  Save this article

Small-business owners and their choice of banks: Some lessons from the banking literature and game theory in the aftermath of the COVID-19 pandemic

Author

Listed:
  • Srinivas Nippani
  • Jeffrey Muldoon
  • Derek Yonai
  • Diego Matricano

Abstract

Finance textbooks treat banks as homogenous institutions. Intuition suggests that small businesses should interact with large banks, given the latter’s ability to diversify risk. Large banks are involved in transactional banking as part of their business relationships, and small and community banks use soft information and value long-term relationships with borrowers. During the recent COVID-19 pandemic and the subsequent Paycheck Protection Program lending, large banks supported bigger businesses while small and community banks supported small businesses. To investigate this phenomenon, we focus on the U.S. experience and conduct a game theory analysis. Based on the results, we recommend that small businesses develop long-term relationships with small and community banks, which are more likely to use soft information and support the small businesses during a crisis.

Suggested Citation

  • Srinivas Nippani & Jeffrey Muldoon & Derek Yonai & Diego Matricano, 2025. "Small-business owners and their choice of banks: Some lessons from the banking literature and game theory in the aftermath of the COVID-19 pandemic," Journal of Small Business Management, Taylor & Francis Journals, vol. 63(4), pages 1695-1720, July.
    • Handle: RePEc:taf:ujbmxx:v:63:y:2025:i:4:p:1695-1720
    DOI: 10.1080/00472778.2024.2399191
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00472778.2024.2399191
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00472778.2024.2399191?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ujbmxx:v:63:y:2025:i:4:p:1695-1720. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/ujbm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.