Final answer:
Countries with weak legal environments can indeed erode key strategic assets of firms, as a strong legal system that upholds property and contractual rights is essential for business protection and economic growth.
Step-by-step explanation:
It is true that countries with weak legal environments can erode key strategic assets of firms. The effectiveness of a country's legal system is often reflected in how well it upholds property rights and contractual rights. The World Bank has developed a ranking system for countries' legal systems on a scale from 1 to 6, with 1 being the lowest and 6 the highest rating based on these considerations. Countries such as Afghanistan, the Central African Republic, and Zimbabwe have low ratings and consequently have experienced economic challenges such as low GDP per capita, economic disruptions, and political instability. An effective legal environment is crucial for protecting the assets and interests of businesses operating within a country. Weak legal systems, marked by corruption and lack of rule of law, can directly impact labor productivity and economic growth, making such environments risky for firms seeking to protect their strategic assets.