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I am running regression on bank profitability and different variables.

My question is why won't GMM let me use my dummy variable? Is there a different way I can specify my dummy variable? (whether or not a bank is consider a community bank).

Second, I have 82 banks with 4 years. Is this a large enough sample size and observation size?

Thank you so much for your help. I've been looking all over the internet and in books for the answer.

What does GMM do when you try, i.e. what do you mean by GMM won't let you?

It gives me "Near singular matrix" and as soon as I get rid of the dummy variable it runs.

Check whether you are in the dummy variable trap.