Abstract
The study identifies the challenges motor and pump exporters face in the Coimbatore region. This city is also called as ‘Pump City of Asia’. Despite the export potential, these exporters are facing challenges which are largely ignored by researchers, academicians, and policymakers. The application of motors and pumps in numerous industries signifies the need for research in this particular sector, especially the export segments. Various challenges faced by motor and pump exporters in this region were identified to test the hypothesis. In a later stage, we tried to measure the impact of these export issues on the export performance of the firms. The study assumed that various export challenges directly or indirectly impact motor and pump exports. We tried to explore the association between export problems and export performance, contrary to all the previous studies conducted by researchers and academicians on motor and pump exports. This region (Coimbatore, Tamil Nadu) is an ideal place for research and optimisation of desired results because of its market share and reputation in the global market. We have collected data from 220 exporters (motor and pump) through a field study from January to September 2021. We have identified the challenges using principal component analysis and confirmatory factor analysis, and the impact of these impediments on the export performance of the firm was analysed through path analysis. The study depicts the major challenges, and derived results from the analysis state that there is a significant impact of labour issues, cultural differences, raw materials, and geographical distance on the performance of the motor and pump exports from the Coimbatore region.
Introduction
In this study, we tried to pinpoint the vital problems faced by the motor and pump exporters in the Coimbatore region. The prior literatures indicate that there is a need for academic and market research because exporters are not aware of market entry strategies (Devakumar, 2016), insufficient information on foreign trade policies (Kavitha & Thayumanavar, 2017), and oblivious viewpoint of the manufacturers (Murugan & Selladurai, 2014) toward competitive advantages are the major distress prevails in this industry. There is a huge void between the production of motor and pump sets and sales strategies (Premkumar & Balamurugan, 2014) adopted by these manufacturers and exporters in the global market. The motor and pump industry could be more organised in terms of exports in this region (Ken Research, 2015). Also, the study collects data on various issues such as compliance (Rao, 2019), operational approach (Prasad et al., 2019; Selvi & Sheeba, 2018), production capacity (Murugan & Selladurai, 2014) and global competition (Devakumar, 2016), and so on. Hence, we tried to thoroughly discuss the various problems that prevail in this region related to motor and pump exports with extensive research and rigorous methodology. The study will help industrialists by rendering the information on major issues they need to address and a handful of suggestions in order to thrive in the global market.
The motor and pump industry bloomed in India after the launch of the first submersible pump in the year 1928 and the electric motor in the year 1937 in the Coimbatore region (SIEMA, n.d.). Since then, the motor and pump Industry has thrived in India because more than half of the population still relies on the agriculture sector for income (IBEF, 2021). Recently, the focus of the manufacturers has shifted from domestic market demand to the global market due to enormous market opportunities in a foreign land (Chakravarthy, 2020) and efficient new foreign trade policy. The ever-increasing demand in energy and industrial sectors (such as mining, oil and gas, steel) stirred the future prospect of this industry worldwide. The motor and pump industries from the Coimbatore region fulfil a further 50% of the domestic demand (SIEMA, n.d.) of India. This region is also called as ‘Pump City of Asia’ because of the rapid innovation, production potential, and entrenched market distinction in the international market. As per TERI (2016) market report, the Coimbatore district have almost 600 manufacturing firms and 400 ancillary units in this region engaged in the production and export of motors and pumps and its spare parts for various industries, such as agriculture, food and drink, chemicals, household, manufacture, mining and quarrying, oil and gas, infrastructure, water treatment, defence and nuclear power plants. They have attained a reputation in the global market for product quality (Prasad et al., 2019), R&D investment, product innovation (Chakravarthy, 2020; Jayanthi, 2015), and competitive pricing (Jayanthi & Amudha, 2013).
In this study, we tried to connect the thread between the export challenges and their impact on the export performance of the firms. We first identified the workplace and operational challenges these motor and pump manufacturing companies are facing in Coimbatore city. Then, we determine the marketing and sales problems these firms are encountering during their export operations. In the later stage, the hypotheses were tested to understand whether these challenges had any significant impact on the export performance of these firms or not. The several segments of this article are systemised in the following manner; the first section devises an outline for the study where we explain the purpose of conducting this research. The second section scrutinises the previous studies conducted by various academicians, researchers and think-tank for in-depth assimilation of the market elements, earlier illustration of export problems, and the influential factors of exports. Here, we have identified the gaps in previous literature by materialising and investigating the available research articles. The third section explains the methodology used in the research and its relevance in the study, which will help to perceive the empirical evidence. The fourth segment of our study unfolds the empirical outcome attained following rigorous analysis. The empirical evidence is discussed in detail with the managerial relevance of the research outcome. At last, we conclude and offer suggestions to the various stakeholders based on the pragmatic and factual outcome derived from this research.
Conceptual Understanding and Hypotheses Development
Conceptual Understanding
Various studies have been conducted to identify the problems faced by the exporter and tried to correlate the export challenges with the export performance in their studies. We adopted the model proposed by Jalali (2012) after a careful examination of the literature and variables for this study. This research outlined the various aspects of the export problems, such as environmental aspects, operational aspects, financial aspects, legal aspects, logistics aspects, and resources dimensions and tried to establish a relationship between the export performances of the firm because the model (Jalali, 2012) indicates that the export challenges do impact the export performance of the firm. The rationale behind choosing this model because it allowed us to bring in diverse challenges within one framework, which was not the case in various other frameworks used in previous literature (Fernando & Samarakoon, 2020; Martinović & Matana, 2017). Also, there were enormous studies where the researchers tried to measure the impact of global competition (Fernando & Samarakoon, 2020; Sousa & Novello, 2014), labour and technological issues, training problems, power problems (Indhu et al., 2021), economic slowdown, buyer relationship (Sousa & Novello, 2014), legal issues (Fernando & Samarakoon, 2020), market volatility, product complexity, resources inadequacy, distribution, offshore outsourcing (Bertrand, 2011) and other export barriers (Rhommadhonni, & Dhewanto, 2017; Sinkovics & Sinkovics, 2018) on export performance of the firm.
This study is distinct in two ways (in terms of a conceptual framework); first, we focused on motor and pump export industries and second, the variables considered for this study is distinct (with additional input apart from existing variables) from earlier research on motor and pump exports. We tried to address and focus specifically on the operational, workplace, marketing and sales barriers in this proposed model (see Figure 1). Additionally, we intend to explore the impact of these barriers on the export performance of the firms, assuming that the export challenges significantly impact the export performance of the motor and pumps enterprises of Coimbatore city. The model highlights the major problems in export operations and workplaces, such as labour shortage, country differences, demand fluctuation, lack of communication, technology usage, raw-material unavailability, geography distance, price fluctuations, and so on. Furthermore, in the marketing and sales operations, it indicates the challenges such as global outreach, market fluctuations, excessive tax, market competition, product quality, high transaction cost, lack of market opportunities, contractual law differences, unavailability of common facilities centre and unique demands (for OEMs) due to the distinct application of the motor and pumps in various industries.
Hypotheses Development
Workplace and Operational Problems Faced by the Motor and Pump Exporters
Few studies pinpoint the workplace and operation challenges faced by motor and pump exporters during the manufacturing and export process. The research conducted by Chakravarthy (2020) pinpoints that product development in international trade is an extremely complex process, and those who practice innovation in their product line relish the perks in the global market. The strategy paper (Deloitte, 2019) published for engineering exports recommends that the pump imports can curtail if the manufacturer engages more in capability development and technology-transfer operations. Thayumanavar and Kavitha (2019) examined the risks encountered by small-scale motor and pump exporters and observed that the majority of risk consists of credit and legal risks. They highlight that government policies and commercial risks are extremely crucial for growth in this sector. At the same time, Selvi and Sheeba (2018) observed that the irregular power supply is a major problem faced by the pump manufacturing units. Apart from the power supply, other issues such as shortage of raw materials, the efficiency of labours, technological backdrop, commercial risk, and political risks are highlighted in their research work. Hussain (2018) in his study emphasised much on communication barriers because it was the major cause of conflicts between manufacturers and distributors. He found that the conflicts due to communication often and directly impact the work relationship satisfaction between manufacturers and distributors. Also, one of the studies (Wessel, 2018) suggests that investors (motor and pump manufacturers basically) infuse (their investment) in changing technology with environmental compliance. Also, earlier studies (Devakumar, 2016; Rai, 2016) indicate that quality control, well-timed delivery, and adoption of digitalisation and automation in manufacturing can help motor and pump manufacturers to spread their existing market overseas. Sharma (2015) pinpoints that Kirloskar Brothers Ltd. is shining in the global setting because they maintained their product line and excellent track records of installation, maintenance and service safety. The earlier market research (Ken Research, 2015) observed that technological advancement and government investments were considered crucial for the growth of the Indian pump market. Murugan and Selladurai (2014), in their research, states that in order to gain a competitive advantage in the market, the manufacturer does not necessarily need to compromise the quality of pumps. The various studies (Jayanthi, 2012; Jayanthi & Amudha, 2013a; 2013b; 2013c) acted as a cynosure for us because they were in the right spot when they discovered the major workplace and operational challenges prevail during the international trade (see Table A1) which we also used in our study with appropriate consultation with motor and pump exporters in this region. Rajasekaran and Krupa (2013) found that the exporters follow the market practices of uninterrupted logistics and supply chains. Prior research (Suganthi, 2012) also indicates that the surge in competition also pushed manufacturers to modify their product lines on a timely basis with the technological up-gradation and buyers’ demands. Few studies (NIPL, 2012; Rijesh, 2007; Savelli, 2005) pinpoints the other challenges, such as the presence of foreign companies, connectivity issues, and high freight cost during the export operations of motors and pumps. Also, we reviewed a few classical literatures (Pump Industry Analyst, 2001, 1999; Chaudhuri, 1967) to understand the challenges such as price fluctuations, the significance of priority segments, and inadequate decision-making authority in the firm because these issues were not addressed in the recent studies. Thus we posit the following hypotheses on the basis of previous findings and established relationships:
Hypotheses on the impact of the workplace and operational challenges on the export performance of the firms
Marketing and Sales Problems Faced by the Motor and Pump Exporters
The research conducted by Mukherjee (2020) points out that the payment collection in domestic/foreign trade from buyers, distributors, and vendors became arduous. It indicates that the structural composition of the Indian economy causes challenges in payment collections. The earlier studies (World Bank Group, 2018) highlighted the financial aspects where the shortage of cash flow was mainly discussed, and (Hussain, 2018) observed the absence of synergy between buyers and sellers in the motor and pump industries. Kavitha and Thayumanavar (2017) in their article pinpoints that the key challenge for the pump manufacturer is to cope with the market demand because market demand is seasonal, the profit margin is low, and production cost is incredibly high. Further, they suggest that technological up-gradation can resolve these issues. The research by Orchard (2018) states that pump companies can attain growth by upgrading their manufacturing facilities along with effective control over the manufacturing process. We think the establishment of a common facility centre (CFC) can assist the manufacturers and exporters in making structural change in manufacturing. Also, we would like to mention the work of Lahirichakrabarti (2016) and Malik (2016), who identified the more pressing and practical issues, for example, consideration of new market opportunities (in board meetings) and transportation costs exporters have to bear during international trade operations. On the other hand, Sehra Pump (2016) states the major reason behind the setback in the growth of pump manufacturers in the global market is largely due to rapid change in technology, unique/personalised demand, with the mechanics of repetition in export operations. Murugan and Selladurai (2014, 2007) recommend that the optimisation of information and strategic pools can help motor and pump manufacturers achieve a competitive advantage in the market. Subsequently, systematic array-based clustering can minimise the transaction/operation cost and improve the firms’ performance. Rajasekaran and Krupa (2013) discloses that the marketing strategy with thorough planning (for example, identification of the market, market comprehension, and environmental factors) should be applied in each export firm. Furthermore, they emphasised much to adopt a customer-centric attitude while adopting the marketing and sales strategy. The report published by NIPL (2012) specifies the competition faced by the newcomers in the international market by exposing themselves to big corporations (for example, Grundfos, KSB, Sulzer, Ebara, etc.). Also, the report points out that the provision of ‘after-sales services’ is often complex in export operations. Yu (2011) and Chadha (2010) studied the macro-economic and externalities in export operations and revealed that the desired market should have affirmative tax policies and trade laws, and subsequently, the problem of exchange rate fluctuations, trade patterns and inadequate rebates and tax off-sets are widely discussed. Few studies (Chandrakumarmangalam, 2005; Kannan & Mannivanan, 2005; Kumar, n.d.) also highlighted some notable challenges in motor and pump exports such as poor credit facilities to the exporters, foreign venture, forthcoming competition in the form of ‘cheap Chinese motor and pumps’, and excessive-quality competition was examined in ‘partial-gaze’. The study conducted by Switalski and Pakula (2005) in Poland found that the pump companies were facing strong competition from the representative offices and branch offices of foreign companies. Also, they faced persistent market demand due to protective barriers, which we can assume is the case in our study as well. Also, some classic research (Pump Industry Analyst, 2001; Vijayalakshmi, 1997) we reviewed to include age-old problems such as middleman intervention, utilisation of foreign expertise, and competitive pricing issues. To test the earlier assertions (with additional inputs) and findings, we propose the following hypotheses:
Hypotheses on the impact of marketing and sales challenges on the export performance of the firms
Data and Research Methodology
Data
We have collected the primary data through a field visit from the month of January to September 2021. We used the questionnaire (pre-designed and pre-tested) and survey method to gather data for our research. The 220 responses were collected from the selected taluks in the Coimbatore region (namely Annur, Coimbatore North, Coimbatore South, Kinathukadavu, Maddukarai, Mettupalyam and Sulur), where these motor and pump manufacturing industries are at present active and operationalised.
Sampling Method
We have used the proportional sampling method to distribute the samples appropriately from the chosen population (Salkind, 2010). We split the defined population into sub-populations, and later, we selected the samples from each sub-population drawn from a random sampling technique. The population are divided into sub-populations in accordance with attributes.
In this,
Thenceforth, in accordance with simple random sampling, the nh is determined from each stratum of the sample size. Relying on a prior survey (Kannan, 2005) which depicts that there are 500 manufacturing units in this region that are exporting fully functional motors and pumps, we define our total population size.
The sample size has been drawn using the following criteria:
In this, N is the population size (which is 500 firms), X is the confidence level at 95%, E is the margin of error (5%). We arrived at 218 sample size after the calculation, but we considered 220 samples for our research.
Statistical Tools
We used principal component analysis (Thurstone, 1931) to examine the underlying variables in sizeable sets of factors to institute its reliability. It is often used to develop a scale in order to uncover the underlying sets of constructs in variables. Furthermore, we verify the model fit of the structure from the substantial sets of observed variables through confirmatory factor analysis (Jöreskog, 1969). It helped us to frame the hypotheses and test the relationship between fundamental latent constructs and observed variables. Finally, path analysis (Wright, 1921), a special case of structural equation modelling (SEM), was used to establish the authenticity of the linear causal relationship between variables because it is an advanced form of multiple regression technique. The study by Hussain (2018) used the SEM in his research to establish a causal relationship based on the identified variables through PCA and CFA, which initially laid the basis for the methodology we applied in our study. The factor analysis, confirmatory factor analysis and path analysis were performed with the help of SPSS 26.0 and AMOS 26.0 software.
Empirical Evidence and Discussion
The Workplace and Operational Problems Faced by the Motor and Pump Exporters
In this segment, we will discuss the derived results from the empirical investigation, which briefly explains the workplace and operational challenges faced by motor and pump exporters during the export operations in Coimbatore city. The statements are drawn through a careful and extensive literature review (see Table A1 & Section ‘Workplace and Operational Problems Faced by the Motor and Pump Exporters’). The 32 statements are taken initially for the principal component analysis, which will eliminate the statements with minimum covariance in the later stage of the analysis.
The reliability test indicates Cronbach’s alpha (α) which ultimately computes the internal consistencies in the datasets. The Cronbach’s alpha was 0.824 (which is more than 0.70). It means the internal consistencies of datasets are valid. The K-M-O value was observed to be 0.733; which means the data is acceptable because the value is greater than 0.70. In addition, Bartlett’s test of sphericity discloses that the extracted results is fit for the principal component analysis because the significance value is 0.000 (p<0.05). After examining and meeting the sampling adequacy criterion, we checked the communality tables and eigenvalues greater than 1 were drawn based on the rotation sums of squared loadings, and in a later stage, we will name these components. The 11 factors report 68.12% of the total dispersion (within datasets), which is ideal according to the standard statistical criteria. The statement in the factor reduction process eliminated on the basis of factor loading explains the smallest part of dispersion provided, which is not higher than 0.4. After removing statements during factor analysis, we had to repeat the exercise each time the statements were eliminated. Initially, we included 32 statements and the loading score for 30 statements was greater than 0.4. So, we have to get rid of 2 statements to build our underlying constructs.
Table 1 pinpoint that the inter-correlation between the explored variables is proportionately high because Cronbach’s alpha’s estimated to be ≈0.824. We cluster the 30 statements from our outcome inside 11 factors (major workplace and operational problems) on the basis of variances betwixt the variables.
Factors Identified Through Rotated Component Matrixa—Workplace and Operational Problems.
The components from Table 1, disclose that the first component is extremely correlated with the labour issues and country’s contrast in the export firm. Subsequently, the second component is vastly correlated to demand and, communication and technology. Likewise, the third component is highly correlated with internal barriers and domestic competition. Furthermore, the fourth component distinctly correlated to infrastructural and management problems. Subsequently, the fifth, sixth and seventh factors largely correlated to the raw material and geography, product design and delivery, and foreign competition (see Table 1). Consequently, the eighth component is the in-extreme correlation with the freight cost of the firm. Afterwards, the ninth component is vastly related to the price fluctuation and additional services provided by the motor and pump exporters in the Coimbatore district. Further, the component is correlated with the conventional practices for production in the motor and pump industry. And, the last component is highly correlated with production techniques adopted by these motor and pump manufacturers from Coimbatore (see Table 1).
We used confirmatory factor analysis to validate the structural fit of the sets of observed elements. It allowed us to test the interconnections between the observed factors and their latent constructs. The 7 statements were excluded through confirmatory factor analysis because of poor factor loadings, which remain lower than 0.4 (<0.4). The freight cost, conventional methods and production techniques were omitted owing to the lack of additional components. Thus, the constituents’ that include a single variable is inappropriate for the measurement of a model. The 11 statements were removed on account of the poor relationship betwixt the model’s constructs and its indicators. Figure 2 illustrates that the measurement model corroborates principally 4 components that comprise 10 crucial workplace and operational challenges faced by pump and motor exporters in the Coimbatore district. It exhibits that under LICD component, the exporters are facing the challenges such as language and cultural differences, differences in economic and legal systems, and a lack of engineers. The DCT component highlights the challenges such as fluctuation in demand, lack of communication and technology transfer. Further, the RMG component reveals that the inefficient materials and geographical distance for export operations are a stiff challenge. And, the PFAS exhibit the challenges such as price fluctuations in the overseas market and installation and maintenance of motors and pumps (see Figure 2).
We observed that the derived outcome from Chi-square is significant (see Table 2) in this paradigm. The modification indices scientifically helped us to revamp our model, and we set the threshold to 4 using modification indices. Here, we avoid doing covary of error terms due to insignificant error term. The critical ratios surpassed the standard utility (>1.96) for all the constructs. Additionally, Figure 2 highlights the standardised regression weights in the demonstrated model. The aggregates from Table 2 assert that the derived p value is 0.017, which is lesser than the recommended value (<0.05). Furthermore, we observed that Chi-square value is 1.631 (between 1 and 5), which validates that the model is a good fit. The calculated GFI index is 0.958 (>0.9), and the AGFI is 0.921 (>0.9), which clearly specifies that our model is a good fit. Also, the RMSEA value is 0.054, a number which is smaller than 0.08, plus the P-Close aggregate is 0.385, a number significant to 0.05, which validates the ‘Absolute Fit’ of the model. Additionally, the derived outcome from NFI is 0.901 (>0.9), and CFI is 0.958 (>0.9), which stipulates the goodness of the model fit (see Table 2).
Estimation of Measurement Model Fit for Structural Equation Modelling.
The Marketing and Sales Problems Faced by the Motor and Pump Exporters
In this segment, the various marketing and sales challenges encountered by motor and pump exporters during the export operations in this region.
The Cronbach’s alpha was 0.760 (which is more than 0.70). It means the internal consistencies of datasets are valid. Also, the K-M-O value was observed to be 0.750, which means the data is acceptable because the value is greater than 0.70. Additionally, Bartlett’s test of sphericity discloses that the extracted results are fit for the principal component analysis because the significance value is 0.000 (p<0.05). The 11 factors report 65.90% of the total dispersion (within datasets), which is ideal according to the standard statistical criteria. Here, initially, we included 34 statements (see Table A1 & Section ‘Marketing and Sales Problems Faced by the Motor and Pump Exporters’), and the loading score for 33 statements was more than 0.4; So we had to get rid of 2 statements to build our underlying constructs. Table 3 pinpoint that the inter-correlation between the explored variables is proportionately high because Cronbach’s alpha’s estimated to be ≈0.760.
Over and above, the components from Table 3 disclose that the first component is extremely correlated with global outreach, exchange rates and price wars. Subsequently, the second component is vastly correlated to financial distress and capital venture. Likewise, the third component is highly correlated with the tax burden and market competition. Furthermore, the fourth component distinctly correlated with customer relationships and export operations. Subsequently, the fifth, sixth and seventh factors largely correlated to the transaction cost and market opportunities, contract laws, facilities centre, product quality and unique demand (see Table 3). Consequently, the eighth component is the in-extreme correlation with the transportation cost of the firm. Afterwards, the ninth component is vastly related to the lack of demand and banking services offered to the motor and pump exporters in the Coimbatore district. Further, the component is correlated with the logistics and prices. And, the last component is highly correlated with the payment collections and after-sales services problems in motor and pump exports in the Coimbatore region (see Table 3). Thenceforth, 14 statements were excluded through confirmatory factor analysis because of poor factor loadings, which remained lower than 0.4 (<0.4). The problems prevail to the joint venture, transportation cost and after-sales services were omitted owing to the lack of additional components. Afterwards, 4 statements were removed on account of the poor relationship betwixt the model’s constructs and its indicators.
Factors Identified Through Rotated Component Matrixa—Marketing and Sales Challenges.
Figure 3 illustrates that the measurement model corroborates principally 5 components that comprise 12 prime challenges faced by pump and motor exporters in the Coimbatore district during marketing and sales operations. In Figure 3, we observed that under the GOMF component, the exporters are facing the challenges such as offices abroad, high cost of production and low-profit margin, middleman intervention, and foreign specialisation. The TBMC component exhibits the challenges such as tax burden and competition from cheap Chinese motors and pumps. Further, the TCMO component reveals the challenges, such as high transaction costs and new market opportunities. The CLCFC component illustrates the problems such as unfavourable contract laws and the unavailability of common facilities centres. Lastly, the PQUD component reveals that exporters are facing the challenges such as excessive-quality competition and unique demand due to the application of motors and pumps in numerous industries (see Figure 3). We observed that the derived outcome from Chi-square is significant (see Table 4) in this paradigm. The modification indices scientifically helped us to revamp our model, and we set the threshold to 4 using modification indices. Here, we avoid doing covary of error terms due to insignificant error term. The critical ratios surpassed the standard utility (>1.96) for all the constructs. Additionally, Figure 3 highlights the standardised regression weights in the demonstrated model.
The aggregates from Table 4 assert that the derived p value is 0.002, which is lesser than the recommended value (<0.05). Furthermore, we observed that Chi-square value is 1.739 (between 1 and 5), which validates that the model is a good fit. The calculated GFI index is 0.945 (>0.9), and the AGFI is 0.903 (>0.9), which clearly specifies that our model is a good fit. Also, the RMSEA value is 0.058, a number which is smaller than 0.08, plus the P-Close aggregate is 0.255, a number significant to 0.05, which validates the ‘Absolute Fit’ of the model. Additionally, the derived outcome from NFI is 0.832 (close to 0.9 and acceptable), and CFI is 0.917 (>0.9), which stipulates the goodness of the model fit (see Table 4).
Estimation of Measurement Model Fit for Structural Equation Modelling.
Path Analysis
The researchers used the direct effect approach in this study due to the lack of an indirect effect approach in international business while exploring export challenges and their causes. The hypothesised path is tested using the earlier tested model by Jalali (2012) in his study. Figure 4 exhibits the structural model, which confirms predominantly 9 components composed of 10 major workplace and operational challenges and 12 major challenges faced by motor and pump exporters in the Coimbatore area during marketing and sales operations. And the study tried to build the causation model for the workplace and operational challenges and marketing and sales problems with the export performance of the motor and pump export firms in the Coimbatore province.
Figure 4 illustrates that under the LICD component, the exporters are facing the challenges such as language and cultural differences, differences in economic and legal systems, and a lack of engineers. The DCT component exhibits the challenges such as fluctuation in demand, lack of communication and technology transfer. Furthermore, RMG component reveals that the inefficient materials and geographical distance for export operations are a stiff challenge. Besides, the PFAS component exhibits the challenges such as price fluctuations in the overseas market and installation and maintenance of motors and pumps (see Figure 4). Also, Figure 4 exhibits that under GOMF, component exporters are facing the challenges such as offices abroad, high cost of production and low-profit margin, middleman intervention, and foreign specialisation. The TBMC component depicts the challenges, such as tax burden and competition from cheap Chinese motors and pumps. Moreover, TCMO component pinpoints the challenges, such as high transaction costs and new market opportunities. The CLCFC component exhibits the problems such as unfavourable contract laws and unavailability of common facilities centres. Also, it is evident from PQUD component that exporters are facing the challenges such as excessive-quality competition and unique demand due to the diverse application of motors and pumps in numerous industries.
The aggregates from Table 5 assert that the derived p value is 0.00, which is lesser than the recommended value (<0.05). Furthermore, we observed that Chi-square value is 2.706 (between 1 and 5), which validates that the model is a good fit. The calculated GFI index is 0.954 (>0.9), and the AGFI is 0.858, which is acceptable because the value is close to 0.9 and indicates that our model is a good fit. Also, the RMSEA value is 0.088, a number which is smaller than 0.08, plus the P-Close aggregate is 0.018, a number significant to 0.05, which validates the ‘Absolute Fit’ of the model. Additionally, the derived outcome from NFI is 0.876 (close to 0.9 and acceptable), and CFI is 0.9 (>0.9), which stipulates the goodness of the model fit (see Table 5).
Estimation of Structural Model Fit-path Analysis.
Standardised Parameters Estimates for the Hypothesised Model
The model supports the impacts of the workplace, operational, marketing, and sales barriers on the performance of the motor and pump manufacturing and export firms in the Coimbatore area based on the p value and regression weights.
Results from Testing Hypotheses: Export Barriers and its Impact on Export Performance
The result from standardised parameters estimates shows that there is a significant and negative impact of labour Issues (p<0.05), country’s differences (p<0.05), raw material insufficiency (p<0.05), and geography distance (p<0.05) on export performance of the pump and electric motors industries in the Coimbatore district (see Table 6). Thus, the empirical results support the hypotheses (H1 and H3) framed in this study to measure the impact of export barriers on export performance. It is observed that even though the results do not support the H8 and H9, there is an impact of product quality (p=0.06), unique demand (p=0.06), contractual law (p=0.06), and un-availability of common facilities centre (p=0.06) on export performance of the pumps and motor exports from this region, but the impact is too weak.
The results from standardised parameters estimates also show that there is no impact of demand fluctuation, communication and technology (p>0.05), price fluctuations, additional services (p>0.05), global outreach, market fluctuations (p>0.05), tax burden, market competition (p>0.05), transaction cost, and market opportunities (p>0.05) on the export performance of the motor and pump exports from the Coimbatore city (see Table 6). Thus, the empirical results do not support the hypotheses (H2, H4, H5, H6 and H7) framed in this study.
Standardised Parameters Estimates for Hypothesised Paths.
Findings
From the research outcomes, we want to draw researchers’ and practitioners’ attention towards the major challenges the motor and pump export firms face in the Coimbatore area and how it impacts their export performance. If we look at the workplace and operational problem, chiefly the majority of the workforce employed in labour work (for example, smelting, heat treatment furnace, and moulding) is migrant workers from North India, and the ‘Tamil’ language is quite alien for them. This broadens the communication gap between supervisors and employees and meddles the export productivity (Antony, 2021; Jayanthi, 2013). Furthermore, during the festivities season, these migrant labours return to their native place, which disrupts the production process due to labour shortages. Additionally, we found that the differences in the economic and legal systems of the nations also dampen the export operations such as power tariffs, quality-check, and foreign trade policies (Thayumanavar & Kavitha, 2019). We want to highlight that the oscillating demands, lack of effective communication, and technology transfer also agitate the motor and pump exporters from this city (Deloitte, 2019). The availability of futile materials or scarcity of raw materials (steel, iron and aluminium) due to asymmetric supplies and uneconomical pricing directly strikes production functions and quality, which ultimately causes dissatisfaction among the buyers (Jayanthi & Amudha, 2013). Also, long-distance shipments are more exposed to corrosion and rusting if not appropriately packed (Kumar, 2022). The price volatility and installation and maintenance of motors and pumps are major obstacles for these exporters. Furthermore, if we focus on marketing and sales barriers, most exporters deny having offices abroad due to investment issues. Moreover, demand for high-quality products and energy-efficient motors and pumps shoots up the production cost, but the profit margin is low (Arkolakis et al., 2021). Also, in the Coimbatore region, merchant exporters are highly active and obstruct export operations. We also noticed that the rate of technology adoption and technology transfer is less if we look at their market potential (Meijer et al., 2019). The competition from ‘cheap Chinese motors and pumps’ is also a big stumbling block for these exporters (Shah et al., 2020). Additionally, high transaction costs, lack of market information (Lahirichakrabarti, 2016), unfavourable contract laws, unavailability of common facilities centres (Orchard, 2017), excessive-quality competition and unique demand (Sehra Pump, 2016) are major obstacles for motor and pump exporters of the Coimbatore district.
The findings from path analysis depict that the labour issues, country differences, raw material insufficiency, and geography distance negatively influence the export performance of the motor and pump exporters in this specific region. Additionally, although the impact is not so strong, there is an impact of product quality, unique demand, contractual law, and the unavailability of common facilities centre on export performance of the motor and pump exports in this area. Although, we could not establish the relationship between demand fluctuation, communication, technology, price fluctuations, and global outreach on the export performance of the motor and pumps. The possible extension of the research can explore the functional relations, mediations and moderation effects between these variables.
Conclusion
This study pinpoints the major challenges in the workplace, export operations, marketing and sales by motor and pump exporter firms in this area. In the later stage, the study examined the impact of these challenges on the export performance of the motor and pump exporters. It is observed that there is a significant and negative impact of labour issues, country differences (Selvi & Sheeba, 2018), raw material insufficiency, and geography distance (Jayanthi & Amudha, 2013b) on the export performance of the motor and pump companies in the Coimbatore district. Also, the study concludes that there is an impact of product quality (Kannan & Manivannan, 2005), unique demand (Sehra Pump, 2016), contractual law (Yu, 2011), and un-availability of common facilities centre on the performance of the motor and pump exporters in this province but the impact is too weak. The study shows that there is a considerable impact of export barriers on the export performance of motor and pump exporters in this region. Additionally, our research findings render few deductive arguments for the century-old history of motor and pump industries in the Coimbatore district and the crown of ‘Pump City of Asia’ rightfully attained by the manufacturers and exporters in this region can be due to two reasons. First, they anchored their survival instinct on rapid innovation, tweaked their production potentials, and imprinted their significance in the foreign market through competitive pricing. Second, they produce and supply 50% of the domestic demand (SIEMA Library, n.d.) and own a significant share of the global market as well (according to IPMA (2019), India is the biggest supplier of pumps covering to 100 countries with net value addition of more than 20% which is highest in the world). However, the possible reasons for their setbacks can be their ownership structure (the majority are ‘family-owned’), which ultimately constrains their export operations and strategies to function in isolation. Also, the assistance from local trade bodies (SIEMA, CPC, CODISSIA) is not enough to cognise the full potential of motor and pump manufacturers; It is high time for the EEPC, TPCI, and IBEF to extend their operation and expertise in the Coimbatore region (Rhommadhonni & Dhewanto, 2017).
Theoretical and Managerial Implication
Theoretical Implication
This research contributes towards the existing knowledge of three-fold symmetry. First and foremost, this research identifies the major challenges faced by the motor and pump manufacturing and export firms of this region, which was largely ignored by the previous researchers (Hussain, 2018; Lahirichakrabarti, 2016) who emphasised much on problems prevail in the domestic market. Second, it offers the idea that there is a scope for possible extension and implication of this model by testing the model in various industries and regions. Also, this model can be used by the researcher to measure the impact of export barriers on export performance individually based on the selection of various challenges that prevail in the export market (Jayanthi, 2013b). Third, as per our knowledge, this study is the first attempt to synthesise the challenges (marketing, sales, operational, and workplace) of the motor and pump exporters and the impact (analytically) of these barriers on their export performance. Lastly, we would like to highlight that this research alters and extend the model (Jalali, 2012) used in our study by implementing the ‘proportionate division’ and ‘regulatory focus approach’ in hypothesised model.
Managerial Implication
This study is a tip-off for the exporters, government organisations and strategists to address the challenges that prevail and restructure the motor and pump sectors mainly from the international trade perspective. Also, we suggest that motor and pump exporters from the Coimbatore province should revamp their manufacturing firms by employing qualified engineers instead of focusing on a cheap workforce (Lahirichakrabarti, 2016). Additionally, exposing the managers and CEOs to cross-country cultural differences and immediate procurement of the raw material (Selvi & Sheeba, 2018) upon the receipt of a purchase order from buyers for timely delivery will address the issues we highlighted in this study. We suggest that market practitioners hire fresh mechanical graduates (from engineering institutes) in and around the Coimbatore region so that the shortages of labour issues can be resolved during the festivities season in the absence of a migrant workforce. It can be possible only with academic-industry collaboration (by promoting placement activities). Also, after interacting with exporters’, the majority of them agreed that prices of raw materials (such as steel) are sky-high due to the monopoly of a few big corporations (for example, TATA, JSW, Vedanta) in raw materials. It is suggested that the union or state government (through SAIL) should intervene if the raw material prices are extremely unfair to meet the market demands for the manufacturing of merchandise exports. Lastly, we recommend exporters exploit the Asian market first, where they have dominance, before forethought of entering into a market which is far distant (for example, North America/South America) from India (Lahirichakrabarti, 2016).
Limitations and Scope for Further Study
The research outcomes from this study will propel future researchers to conduct the study further on merchandise goods exports. We argue that there are problems which still left unaddressed (for example, manufacturing) and deserved considerable attention from academia in order to assist this budding sector to bloom in India. Second, we limited our research to the Coimbatore district only; future studies can be conducted in Batala, Jalandhar, Ahmedabad, Kolhapur, Hyderabad and Rajkot. Moreover, the research exploration can be set in motion by carrying out an academic/market case study on the Kirloskar Brother’s pumps plant in Kirloskarwadi (Sangli, Maharashtra) owing to its distinction and production capacity in the international market (Sharma, 2015). Third, future researchers can facilitate their studies by extending the model we have proposed in our study. Also, this model can be used by the researcher to measure the impact of export barriers on export performance. Finally, joint research through industries-academic collaborations (such as collaboration between PSG Institute of Technology and Applied Research and SIEMA or EEPC) can foster industrial development and technological determinism in this region.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors received no financial support for the research, authorship and/or publication of this article.