Hi there,

I have a problem with a fixed effect regression in stata and no idea how to solve it. I have a sample with about 500 companies which are founded in different years and operate in different industries.

With a couple of variables, I want to measure the success of this companies (OLS). Of course, the founded date is from importance due to different economic environments. No problem with this, classical xtreg with year fe.

The problem: each company operates in multiple industries and has no unique category. For example, a company can operate in the field of health care as well as biotechnology and another company operates in health care and ecommerce (up to 5 different categories). In some cases, the industry is highly correlated with the success measurement (y) therefore, fixed effects would be quite useful!

Any idea how to implement fe in this case? Tried it with dummies and weighted dummies but it didn’t work out that well.
Any ideas?

Kind regards
Alex