Free Trade Integration Effect on International Relations through Cross Border Entrepreneurship: A Study from Indonesia and Malaysia International Business Perspective

In the modern age, the trade free integration has become an integral part
which is playing a significant part for the international relations. For
enhancing cross border cost-effective accomplishments, the free trade
integration role is an important which could help to enhance the
international relations. Therefore, the research aim is to investigate the free
trade integration and cross border entrepreneurship role in development of
international relations. To get this objective, the relationship among free
trade integration (FRTI), financial integration (FII), cross border
entrepreneurship (CRBE), bilateral trade (BIT), and international relations
(INR) was being inspected. The data was collected through self-administered
questionnaire from the 200 from Indonesia and 130 from Malaysia by using
purposive sampling technique. The research design was quantitative, and
research approach was quantitative, and applied partial Least Square (PLS)-
Structural Equation Modeling (SEM). The key outcomes shown that FRTI has
positive and significant effect on FII, BII, CRBE and IR. In the same vein, the
key findings also shown that BIT and FII also significantly and positively
effect to CRBE. On the other hand, it was also further found that BIT, FII
significantly and positively mediated between the relationship of FRTI and
CRBE. The further findings shown that CRBE also significantly mediated
between the relationship of FRTI and INR. All these accepted hypotheses
added a body of literature in the extant literature that could add a body of
literature in the extant literature that could become a new research area in
future. This is a reason the current research has a valuable contribution in
the literature through the relationship among FII, BIT, CRBE, FRTI and INR.

Key words:Free Trade, International Relations, Malaysia, and Indonesia