risk avoidance

An informed decision not to accept the *risks (and *rewards) of an activity or *market. Refraining from involvement in an activity or a market, or disengaging from existing commitments, can sometimes be a costly strategy, as it can involve significant *opportunity costs. At the end of the Korean War in 1953, for example, South Korea was one of the world’s poorest countries, with a *per capita *Gross Domestic Product comparable to India and Central Africa. The devastation of war had destroyed much of the country’s infrastructure and industrial base, but over the following decades the country’s rapid economic growth was little short of miraculous. By the 1990s, South Korea had become one of the most affluent countries in the world. International investors who accepted the risks of operating in war-devastated South Korea in its early years were rewarded during the subsequent economic boom, while those who initially avoided South Korea faced expensive entry costs as latecomers to a dynamic Asian "tiger" economy. Contrast *risk acceptance.

Auditor's dictionary. 2014.

Look at other dictionaries:

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