Dear Statalisters,

I would like to include an interaction term between categorical and continuous variables in my model as explanatory variables.
(The categorical variable has 20 categories)

The following is what I want to estimate:

Code:
xtreg y ib(first).categorical#c.continuous, fe
The problem is that my intended base category is still included in the estimation results!


I also tried full factorial interaction and got estimation results without base category (as intended).

Code:
xtreg y ib(first).categorical##c.continuous, fe
However, I do not want to use full factorial interaction since it causes too many variables to be included in the model and I barely get significant coefficients.


My question is, is it still okay to use my first approach? (model with no base category)
Or is it better to use full factorial interaction terms even if I get results with little significance?

Any comment will be greatly appreciated.