Hi, Stata forum,

I am running firm level regression using one country panel data.

For firm:
xtset id year
xtreg dep indep1 indep2, fe cluster(id)

Then, I also wanted to try industry-year fixed effect.
So i create new var:

egen industry_year = group (industry year)
then,

xtset industry_year
xtreg dep indep1 indep2, fe cluster(industry_yea)

And i get the error "xtreg: Panels are not nested within clusters".
Could you please explain me or recommend me what I can do? I am very confused of the economic meaning of this fixed effect and how to use it
Thank you very much!