Analyst reputation and limited attention: How does firm visibility impact measures of reputation?

We investigate the determinants of analyst reputation considering the impact of limited attention. We find support for the hypothesis that capital market participants have limited attention and assess analyst reputation based on their large-firm forecast performance, not their performance as a whole. We find no relation between an analyst's overall forecast accuracy and initially obtaining a high reputation, but we find a significantly positive relation between analyst large-firm forecast accuracy and reputation. Our study reconciles conflicting studies and contributes to the literature investigating analyst incentives, suggesting that high reputation analysts allocate their limited resources to the largest firms in their portfolios.