On Current Status Of Natural-Resource-Oriented Firms In Chinese Ethnic Regions

Firms play a key role in modern markets, which is characterized by dynamic and fast-change due to the ever-increasing pace of globalization and technological renovation. Consequently, the capability of a firm to deal with competition from all levels promptly and effectively is an important capacity for the firm to survive and grow.Most firms in ethnics regions use natural resources and their raw products as the main part of their input, and primary products of such input as the main part of their output, in their production. Thus is the mechanism of the interaction of firm-growth and natural resource exploitation. This research reveals that such natural-resource-oriented firms in ethnic regions bear the following six common traits: 1) growth of a firm depends heavily on how much natural resource it controls, and therefore distribution of natural resources determines the distribution of natural-resource-oriented firms; 2) access to and cost of transportation are key elements influencing a firm's growth; 3) contribution of technology in production process and products varies according to industry - with firms in upper end of the production chain more dependent on natural resources and less dependent on technology than their lower end counterparts, which make firms in the upper end less profitable; 4) growth of a firm (both in terms of enlarged scale and improved asset quality) is accompanied with increased profitability; 5) higher levels of profit of a firm come from better performance in its main business sector; 6) improved efficiency in the management of a firm (such as enhanced managerial efficiency and a sound system in managing inventory and receivables, etc) leads to superior performance.As far as the growth of natural-resources-oriented firms is concerned, local authorities should polish their regulative skills and provide high-quality public goods so that firms can operate in a favorable milieu; firms themselves should focus on transforming the basis of their core capabilities from controlling natural resources to controlling specific knowledge, technique and process concerning production and products. Meanwhile, moderate diversification and temperateindustry integration help as well.