Manufacturers increasingly collaborate with capital-constrained small and medium-sized resellers (SMRs) to enhance supply chain profitability. While extant literature has predominantly focused on the unilateral signalling strategies by SMRs to convey creditworthiness and secure bank financing, this study advances the discourse by repositioning manufacturers as pivotal information intermediaries in the supply chain. By alleviating information asymmetries between banks and SMRs, manufacturers can strategically facilitate improved access to external credit for SMRs. Utilising a game-theoretic framework that treats wholesale price as a signalling device, this research yields four key findings. First, manufacturers can leverage wholesale pricing as a credible signal of SMR quality to banks. Second, under low-to-moderate production costs and high collateral levels, the symmetric-information optimal wholesale price effectively separates high- and low-quality SMRs. Yet, as collateral diminishes, manufacturers are motivated to distort wholesale prices upward to credibly signal high-quality SMRs to banks. Third, when both collateral levels and production costs are low, or when production costs are high, separating equilibria become infeasible, leading manufacturers to implement pooling prices that obscure SMR types. Finally, compared to signalling via trade credit interest rates, manufacturers favour wholesale price contracts for differentiating SMR types only when the trade credit ratio surpasses a critical threshold.
Tian et al. (Wed,) studied this question.