Seeing People: The Selective Attention of Financial Analysts in Their Research Output

We study how analysts’ selective attention to people affects their research outputs. We measure analysts' person orientation by counting how many times they name individuals in their reports. Person-oriented analysts ask more people-related questions during earnings calls and comment more on management turnover than non-person-oriented analysts in their reports. These analysts outperform non-person-oriented analysts in All-Star status, earnings forecast accuracy, and forecast error consistency. They also generate higher long-term returns (41-53 basis points) from their stock recommendations but not short-term returns, implying that investors do not immediately recognize the superior information content of person-oriented analysts' reports. We attribute our findings to person-oriented analysts' superior abilities to acquire and process person-related information rather than better information access. Our study highlights the value of person orientation as a skill for financial analysts.