In this paper, we investigate binary response models for heterogeneous panel data with interactive fixed effects by allowing both the cross sectional dimension and temporal to diverge. From a practical point of view, proposed framework can be applied predict probability corporate failure, conduct credit rating analysis, etc. Theoretically methodologically, establish link between maximum likelih...

We propose a new control function (CF) method to estimate binary response model in triangular system with multiple unobserved heterogeneities The CFs are the expected values of heterogeneity terms reduced form equations conditional on histories endogenous and exogenous variables. requires weaker restrictions compared CF methods similar imposed structures. If support regressors is large, average...