Hello everybody,

I have panel data with two time periods (t=2) and n regions as entities. I am considering the possibility of including a variable to control for country effect in the regressions. In the research, I employ both pooled and fixed effect specifications. If I'm correct, it is unnecessary to include a country variable in the fixed effect model since it is time-invariant. However, I would like to control the country effect in the pooled model.

I generated a factor variable
Code:
egen f_country= group(country), label
and then ran this regression:
Code:
reg y x i.f_country, vce(cluster region_id)
The country effect is not my priority estimation here. I want to somehow control for spatial correlation. My questions are: is it correct to include the country variable in a pooled model? Is there a way to control for a general country effect instead of having the estimates for each country in comparison to the base level?

Thank you in advance for your help