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Having or sharing responsibility for accepting the losses if projects go wrong. Most economic activities are capable of resulting in losses under some circ*mstances, however good the expected results may be. Somebody has to bear the risk of meeting any losses. The first risk bearer for any project is the entrepreneur in a private firm, or the equity shareholders in a company. If the losses are sufficiently bad, other people connected with a firm are also at risk, including creditors, the tax authorities, customers who have paid deposits on goods, and workers left unpaid when a business collapses.
Subjects:Social sciences — Economics
Reference entries
risk bearing
in A Dictionary of Economics(3)Length: 100 words
