The Implication of International Disputes on the International Trade: Malaysia as a Case Study

The relationship between international disputes and international trade is a complex and crucial field of research. Conflicts at the international platform can cause geopolitical instability, thus it affects global trade. Comprehending the impact of political dynamics on trade contacts is essential for maintaining global economic stability. This study investigates the impact of political ties on the volume of bilateral trade, suggesting that positive political relationships increase trade, while negative ones decrease it. Using utility theory, we examine the common ideas held by customers and trade corporations. This theory examines the factors that influence the decision making of individuals which later can provide understanding and insights into the potential consequences of political conflicts on global trade. As a result, it has a big effect on how importers and exporters interact with each other. Our study utilises empirical analysis of monthly trade data to investigate the influence of oscillations in commerce on political ties between nations. Our research suggests that when political relationships deteriorate, it results in enduring alterations in trade patterns, but fluctuations in commerce have little long-term impacts on political relations. This research offers valuable insights into the correlation between political conflict resolution and the stabilisation and promotion of international trade.

کلیدواژه ها:

Bilateral trade ، utility theory ، political relationships ، Trade Pattern