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The purpose of this paper is to develop a loan insurance pricing model allowing for the skewness and kurtosis existing in underlying asset returns.

Using the theory of Gram-Charlier option, the authors first derive a closed-form solution of the Gram-Charlier pricing model. To address the difficulties in implementing the pricing model, the authors subsequently propose an iterative method to estimate skewness and kurtosis in practical application, which shows a relatively fast convergence rate in the empirical test.

Not only the theoretical analysis but also the empirical evidence shows that the effects of skewness and kurtosis on loan insurance premium tend to be negative and positive, respectively. Furthermore, the actual values of skewness and kurtosis are usually negative and positive, respectively, which leads to the empirical result that the pricing model ignoring skewness and kurtosis substantially underestimates loan insurance premium.

This paper proposes a loan insurance pricing model considering the skewness and kurtosis of asset returns, in which the authors use the theory of Gram-Charlier option. More importantly, the authors further propose a novel iterative method to estimate skewness and kurtosis in practical application. The empirical evidence suggests that the Gram-Charlier pricing model captures the information content of skewness and kurtosis.

The purpose of this paper is to alleviate the moral hazard problem created by deposit insurance and therefore develop a deposit insurance pricing model explicitly considering systematic risk.

Using the market model, the authors introduce the systematic risk component consisting of market risk and beta risk. A closed-form solution for the authors’ pricing model is derived based on the option pricing framework.

Compared with the authors’, the pricing model that ignores systematic risk underestimates deposit insurance premium, and cannot cover the excessive loss created by systematic risk. To examine the effect of the systematic risk component on the deposit insurance premiums estimated by the authors’ model, this paper also provides empirical evidence from China by regression analysis. The results demonstrate that, in addition to the individual failure risk, the systematic risk component is properly priced and explicitly reflected in the authors’ model.

More risk factors such as liquidity risk should be introduced in the pricing of deposit insurance.

Deposit insurance premiums estimated by the authors’ model can alleviate the moral hazard problem that banks have an incentive to take on excessive systematic risk, because substantial higher insurance premiums would be charged in doing so.

Applying the option pricing theory and market model, this paper develops a deposit insurance pricing model with explicit consideration of systematic risk. The systematic risk component contains not only the market volatility but also the sensitivity of market risk.

The purpose of this paper is to provide a conceptual model for examining the effects of trust (competence trust, goodwill trust) and cooperation on partner opportunism and for exploring the moderating effects of guanxi on the relationships among trust, cooperation and opportunism in joint ventures.

The sample for this paper comprises 981 manufacturing joint ventures from various industrial sectors. A total of 354 valid questionnaires were collected, representing a 36 per cent response rate. The conceptual model is tested with structural equation modeling adopting AMOS software.

The empirical findings indicate that both competence trust and goodwill trust reduce partner opportunism in a joint venture through fostering cooperation. Competence trust also exerts significant influence on preventing opportunism, whereas opportunistic behavior is not greatly affected by goodwill trust. Additionally, the results reveal that guanxi helps strengthen the negative relationship between cooperation and opportunism.

This paper makes a threefold contribution: First, it investigates empirically the direct influence of two types of trust on partner opportunism. Second, it tests indirect influence of trust on partner opportunism through the path of cooperation. Third, it explores the moderating effects of guanxi in relationships on trust, cooperation and partner opportunism. Implications offers suggestions for management practice to reduce partner opportunism in joint-venture manufacturing.

The motion picture industry is a cultural and creative industry. Unlike its US counterpart, the Chinese motion picture industry is still developing. Therefore, learning from the US market, the purpose of this paper is to analyze the business model of Chinese movies from the perspective of new product diffusion.

Based on 66 movies released in the US and 21 movies released in China, this paper first compares the diffusion curves of Chinese and US movies through the movie life cycle and box office trends. Next, it analyzes the moviegoing behaviors of Chinese and US audiences based on the innovation and imitation coefficients in the Bass model. Finally, it compares the attention to information of Chinese and US audiences from the perspective of interpersonal word-of-mouth (WOM).

In the USA, a movie’s highest weekly box office is usually in its opening week, followed by a weekly decline in revenue; in China, there is no difference in box office performance between the first two weeks, but a weekly decline in revenue similarly follows. US audiences pay more attention to advertisements for movies than WOM recommendations, while Chinese people pay more attention to WOM recommendations. Neither the Chinese nor the US market differs in the volume of WOM between the first week before release and the opening week, and these two weeks are the most active period of WOM in both markets.

During the production phase for Chinese movies, we should satisfy opinion leaders’ needs. During the distribution phase, we should not only focus on market spending before the movie’s release, but also increase market spending in the opening week. During the theater release phase, we should stimulate WOM communication between moviegoers and thereby attract many more opinion seekers.

Few studies have investigated the Chinese motion picture industry from the perspective of new products. This paper compares and analyzes the diffusion of Chinese and US movies using the Bass model of new product diffusion, providing systematic theoretical guidelines for the commercial operation of the Chinese motion picture industry.