What does "adj" in this code mean?

[Phuc Nguyen]

I faced a code a below and I do not understand what does adj mean here

predict adj, residuals
reg adj i.treat, cluster(firms) nocons

I guess it is adjusted standard error for clustering on firms but I am not sure about that

[Rich Goldstein]

no, "adj" is the name of the outcome (dependent, response) variable in the data; see

help regress

[David Fisher]

Since the predict command comes before the regress command, I'm going to assume that this is part of a wider process in which the residuals from a first regression are then passed to a second regression. In which case:

predict adj, residuals

... means "take the residuals from the previous model, and store them in a new variable named adj ";

and...

reg adj i.treat, cluster(firms) nocons

...means "fit a linear regression in which the recently-created variable adj is dependent upon variable treat, with cluster-adjusted standard errors by firms, and with no intercept term".

See help predict and help regress for syntax diagrams.