Enhance documentation with information what happens with time-invariant dummy variables

[hannes101]

I am estimating a within-between model, where the industry classification of a company is stored as a factor variable and has the four levels (Downstream, Midstream, Upstream, Support Services). I just add the variable to the time-invariant portion of the regression formula.
In the resulting output the first level Downstream is dropped and I am now wondering if I need to interpret the coefficients as relative to Downstream?
I hope it's clear what I am asking, perhaps I also need to create dummy variables for each of the industry classifications, but I think the use of a factor variable should be supported, or?

[jacob-long]

Yes, your interpretation is correct. It is similar to the interpretation you'd have if you included a factor variable in a simple linear regression (i.e., in lm()).

I cannot support suppressing the intercept as a way to include every factor level in the output because the within-between model requires a random intercept.

[hannes101]

Thanks a lot! I forgot about the random intercept, since I only used FE in the past. Coming from Economics it's quite unusual to use Random Effects or even Within-Between models, but there's a paper in the works, which is using it :-)