Isnaini Nuzula Agustin*

Department of Management, Universitas International Batam 

Abel Morales Simamora

Department of Management, Universitas International Batam 

Badriatul Mawadah 

Department of Management, Universitas International Batam 

DOI: https://doi.org/10.19184/bisma.v20i2.60039

ABSTRACT 

Climate change has intensified in recent years, leading to the emergence of carbon risk as a new risk factor with the potential to influence capital market dynamics. This study examines the effect of carbon risk on stock price synchronicity and investigates the moderating role of artificial intelligence (AI) innovation among companies listed on the Indonesia Stock Exchange. Using panel data from 76 companies over the 2018–2024 period (396 firm-year observations), the analysis employs a purposive sampling technique and estimates the model using STATA software. The study is grounded in the Efficient Market Hypothesis (EMH) and Signal Theory as its analytical framework. The findings reveal that carbon risk has a negative and significant effect on stock price synchronicity, indicating that investors increasingly perceive carbon-related exposure as firm-specific material information. While AI innovation does not show a significant direct effect, the interaction between carbon risk and AI innovation is positive and statistically significant, suggesting that AI adoption mitigates the negative impact of carbon risk on stock price synchronicity. These findings highlight the strategic role of AI in enhancing sustainability information transparency and improving market responses to climate-related risk in the Indonesian capital market. 

Keywords: stock price synchronicity, carbon,  artificial intelligence,  environmental