Hi there, 

I have the exact same problem. I would also appreciate an answer to this question...

Thanks a lot

In fact Juliane I have not found any clear answer about such issue neither in stata groups nor in any other statistical sites, I tried contact Hoechle the founder of using Driscoll-Kraay standard errors but unfortunately with no response.

I'm really wondering is there any solution for that case, what researcher do if Hausman recommends Random-effects model however there is a cross-sectional dependence problem?? Does random model solve it by default case, if not how shall do?? appreciate any contribution     

Some Responses from Statalist Forum:

To correct random-effects in the presense of cross-sectionel dependence:

Common Correlated Effects (CCE), and the code would be xtdcce2.

regife also fits a model with interactive fixed effects (IFE) following Bai (Econometrica, 2009).

You can also chose to ignore the hausman test, RE is more efficient, but FE is always consistent which is generally more important (efficiency is nice, consistency is essential). The logic: Your beta coefficients will be correct with fixed effects even if Hausman says you can use random effects. Your standard errors might be a bit larger than in random effects, but depending on the field, subject and results, this might not be an issue.

quoted from Statalist.