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st: Regression with cluster error hangs program

From   Gui Deng Say <>
Subject   st: Regression with cluster error hangs program
Date   Tue, 11 Feb 2014 03:03:11 -0600

    I am using Stata13MP and I have two questions regarding OLS
regressions. I have an unbalanced firm-year panel consisting of 35k
observations, about 4900 firms.

I am trying trying to estimate the following model.

regress DV IV i.firm yrdiff i.firm#c.yrdiff

where yrdiff is a time counter variable, measured relative to a
particular year. The reason i'm using i.firm#c.yrdiff is to control
for firm specific time trend

q1. Firstly, estimating this model takes very long ~ 2 hours. Is this
normal? If not, what might be the reason(s)?

q2. Secondly I tried to cluster the standard errors by firm. i.e. i
tried this model
regress DV IV i.firm yrdiff i.firm#c.yrdiff, vce(cluster firm)

This regression kept running...and in the end, the Stata program
freezes. Any ideas?

Many thanks,
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