I have panel data of 2028 obseravtions (156 companies for 13 years). My dependent variable is binary (distressed being 0, non-distressed being 1). I got 438 observations out 2028 as distressed for which I need a matching sample of 438 non-distressed observations from remaining 1590 observations.
My question is how can I match the distressed observations with those of non-distressed observations. Can I use Propensity Score Matching (PSM) method? If yes, is it possible to apply PSM on dependent variable? If yes, how? I am stuck in matching these observations. I need your kind help.
Regards,
Muqaddas Khalid.
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