XPD Inc. and STAR Inc. are Swiss-based companies with subsidiaries located in Manila. Both companies distribute cosmetic and beauty products (produced in Europe) to customers throughout Asia. Both subsidiaries purchase the products at cost and sell the products at 90 percent mark-up. The other operating costs of the subsidiaries are very low. XPD has a research and development centre in Switzerland that focuses on improving its cosmetic technology. Star Inc. has a similar centre based in Manila. The parent of each firm subsidizes its respective research and development centre on an annual basis. Which company is subject to a higher degree of economic exposure? Justify your answer with thorough explanation on both companies.