Locally mean most powerful one-sided test. Using the results of Baltagi, Chang and (mathrm{Li}) (1992), verify that
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Locally mean most powerful one-sided test. Using the results of Baltagi, Chang and \(\mathrm{Li}\) (1992), verify that the King and \(\mathrm{Wu}\) (1997) \(\mathrm{LM}\) test for \(H_{0}^{c} ; \sigma_{\mu}^{2}=\sigma_{\lambda}^{2}=0\) is given by (4.30).
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