Table 2 Explanatory variables used in the output (Y) model

 Size of production

Y

Volume of production (in tons)

Interviews

 Profit margin

pm

Measured as average unit output price less average unit costs expressed as percentage of total value of production (%)

DTI, DOLE, and NSO

The higher the profit margin, the higher the incentive for firms to produce more.

 Corporation

corp

Dummy if the firm is a corporation (1 = corporation, 0 = not a corporation)

Interviews

Corporation has more equity and more capacity to pool the needed resources to produce more products. Thus, corporation, as compared to non-corporation, is more likely to have higher production levels.

 Product form

shrimp, milkfish, tunacan, tunafroz; others

These represent dummies for product form: tunafroz = frozen tuna; shrimp = shrimp; milkfish = milkfish; tunacan = canned tuna; others = other seafood products

Interviews

The product form, which may reflect consumer demand, can dictate the level of production. Tuna and shrimp are often the more internationally demanded commodities. Canned tuna processing firms often require a certain minimum size of production to recoup large start-up investments to be made.