Analyst Rational Inattention: Evidence from CEO Turnover Events
Abstract
ABSTRACT We consider the dynamics of analyst inattention by investigating how analysts allocate their attention when a firm in their portfolio experiences CEO turnover. Our analysis shows that analysts tend to divert their attention toward firms that experience such events, resulting in less attention and a corresponding reduction in forecasting accuracy for nonevent firms. Furthermore, this reduction in accuracy varies with factors related to the costs and benefits of rationally allocating attention to firms that have experienced CEO turnover. Collectively, our analysis responds to the call for research on rational inattention among analysts and illustrates the specific intraportfolio events that alter attention allocation and information. JEL Classifications: G10; G11; G17; G14; M12; M40; M41.
Fields of Study & Subjects
Auditing
Earnings Management
Governance
Corporate Finance and Governance
Accounting Education and Careers
Publication details
- Journal / source
- The Accounting Review
- Publisher
- American Accounting Association
- Volume
- 101
- Issue
- 3
- Pages
- 257–280
- Publication date
- 16 February 2026
- Language
- EN