Influence of virtual currency development and investor attention on financial stocks’ value: evidence from selected Asian equity markets

Purpose - The purpose of this study is to examine the influence of virtual currency (VC) development on financial stocks’ value in selected Asian equity markets and the moderating role of investor attention on this relationship. Design/methodology/approach - The pooled ordinary least squares regression is used on a sample of 138 listed financial firms from four emerging Asian countries for the period 2016–2020. Findings - This study finds that changes in VC values have greater spillover effects on the values of financial stocks in countries which do not recognize the legitimacy of VCs than in countries which do, due to the lack of breadth and depth of the former markets. Moreover, this paper also reports evidence of the greater moderating role of investor attention on this relationship in countries which do not recognize the legitimacy of VCs than in countries which do. Originality/value - Although numerous studies have been conducted on the influence of VCs on stock performance, majority of these studies did not distinguish whether the sample countries being studied actually recognize the legitimacy of VC transactions or not. Moreover, extant literature has not considered the moderating role of investor attention on this relationship. It is the aim of this study to address these research voids by using a refined three-factor theory model of capital asset pricing model incorporating VCs to better represent stock performance in the digital economy era.