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st: Fixed effects or random effects model?

From   sardar ahmad <>
To   Statalist <>
Subject   st: Fixed effects or random effects model?
Date   Fri, 6 Jan 2012 15:43:52 +0000

Dear all,
I am a PhD student and want to analyse Panel data. I have just started to learn about panel data analysis, so I apologise if my question is very basic.The data is for 8 years for 280 companies, I used Hausman test to decide whether to use fixed effects or random effects. The test shows that I should use fixed effects. However, I want to include a number of control variables which are constant over time e.g. industry in which a company is operating. As Stata drops such variables from the model, so I was wondering will it be justified to use random effects instead, even if the Hausman test is significant. Or are there any other alternatives?
Many thanks in advance.
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