This figure plots the annual average information processing efficiency (IPE) for
different analyst groups. IPE is first averaged at the analyst–year level and then aggregated by calendar year. The sample includes all analysts, as well as subsamples of Star analysts, Experienced analysts, High Performing analysts, and analysts employed by Large Brokerages. Star analysts are those with a Star indicator equal to one. Experienced, High Performing, and Large Brokerage analysts are defined as analysts whose tenure (AnalystTenure), past forecast performance (PastPerformance), and brokerage size (BrokerageSize), respectively, exceed the within-year median. Lines trace the time-series evolution of average IPE for each group, with group labels reported at the end of the sample period.
This study introduces a new measure of sell-side #equity analysts' information processing efficiency (IPE), based on how effectively analysts allocate effort across #economically linked firms.
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