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Since endogenous regressors and structural breaks are often encountered in empirical studies with large panels, this extension makes Pesaran's CCE approach empirically more appealing. In addition to allowing for slope heterogeneity and cross\u2010sectional dependence, we find that Pesaran's CCE approach is also valid when dealing with unobservable factors in the presence of endogenous regressors and structural changes in slopes and error factor loadings. This is supported by Monte Carlo experiments.<\/jats:p>","DOI":"10.1002\/jae.2712","type":"journal-article","created":{"date-parts":[[2019,5,2]],"date-time":"2019-05-02T15:03:22Z","timestamp":1556809402000},"page":"883-892","update-policy":"https:\/\/doi.org\/10.1002\/crossmark_policy","source":"Crossref","is-referenced-by-count":26,"title":["Structural changes in heterogeneous panels with endogenous regressors"],"prefix":"10.1002","volume":"34","author":[{"given":"Badi H.","family":"Baltagi","sequence":"first","affiliation":[{"name":"Department of Economics and Center for Policy Research Syracuse University  Syracuse New York"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Qu","family":"Feng","sequence":"additional","affiliation":[{"name":"School of Social Sciences Nanyang Technological University  Singapore"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Chihwa","family":"Kao","sequence":"additional","affiliation":[{"name":"Department of Economics University of Connecticut  Storrs Connecticut United States"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"311","published-online":{"date-parts":[[2019,9,2]]},"reference":[{"key":"e_1_2_7_2_1","doi-asserted-by":"publisher","DOI":"10.1162\/003465397557132"},{"key":"e_1_2_7_3_1","doi-asserted-by":"publisher","DOI":"10.3982\/ECTA6135"},{"key":"e_1_2_7_4_1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jeconom.2009.10.020"},{"key":"e_1_2_7_5_1","doi-asserted-by":"crossref","unstructured":"Bai J. 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