Dear all,

I am running a dynamic panel with clustering with ivreghdfem which is similar to the iv2 command, with an AR(1) Driscoll-Kraay standard errors. I am getting a warning in big red letters

Code:
Warning: estimated covariance matrix of moment conditions not of full rank.
         overidentification statistic not reported, and standard errors and
         model tests should be interpreted with caution.
Possible causes:
         number of clusters insufficient to calculate robust covariance matrix
         covariance matrix of moment conditions not positive definite
         covariance matrix uses too many lags
         singleton dummy variable (dummy with one 1 and N-1 0s or vice versa)
partial option may address problem.
Indeed, I have too many categorical variables and dummies in the model, so there me a problem of overidentification and degrees of freedoms.

I just want to know how to solve with partialing out



The code I am running is

Code:
qui growthgdp l.gdp cpi u Output dummy1 dummy2 c.indicator1##c.indicator1, absorb(time panelid) vce(cluster panelid, dkraay(1))
This is just a small sample of my variables. I have too many dummies and categoricals, as said above, which I consider them all as endogenous in the model

Note that when I run the command without the
Code:
quite
option Stata solves by its own the partial problem by stating at the end

Code:
Partialled-out:       _cons
                      nb: total SS, model F and R2s are after partialling-out;
                          any small-sample adjustments include partialled-out
                          variables in regressor count K

and

Absorbed degrees of freedom:
-----------------------------------------------------+
Absorbed FE | Categories - Redundant = Num. Coefs |
-------------+---------------------------------------|
ts | 40 40 0 *|
id | 30 1 29 |
-----------------------------------------------------+
* = FE nested within cluster; treated as redundant for DoF computation

This is the display output. However, I cannot see the regression output
So

1 )How am I solving it, and do I run the partialling option?

and
2) Will I be able to run margins after that ?

Thank you for any help

Carlo Lazzaro maybe you can be of my help