Profitability at the Starting Line: New Entrants in Rice Trading in Nueva Ecija

Louie R. Nocum Carl and M. Pastorfide Dave

Research on World Agricultural Economy, 2025, vol. 6, issue 4

Abstract: This study explores the profitability and its influencing factors among new entrants in rice trading in the Philippines, particularly in Nueva Ecija. A descriptive-quantitative research design was employed, involving 72 new rice traders selected through random sampling. Multiple linear regression analysis was used to determine the significance and impact of various independent variables on profitability. The study is anchored on Frank Knight’s Risk Theory of Profit and the Resource-Based View (RBV) as its theoretical framework. Findings reveal that variables such as years in rice trading, financial capital knowledge, initial investment, and logistics/transport capabilities have a positive and significant effect on profitability, implying that increases in these factors are associated with increased profit. Conversely, perceived market competition negatively affects profitability. Surprisingly, operational management skills and strength in supply chain also exhibit negative relationships with profitability, suggesting that higher proficiency in these areas may lead to reduced earnings. While the results largely support Knight’s Risk Theory and the Resource-Based View theory, certain findings, such as the negative impact of supply chain strength, partially contradict RBV assumptions. The study offers practical insights for agribusiness development and contributes to broader economic objectives by supporting sustainable rural enterprise and inclusive growth.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reowae:412829

DOI: 10.22004/ag.econ.412829

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