This tests are panel versions of the locally robust LM tests of
Anselin et al. (1996), based on a pooling assumption: i.e., they do
not allow for any kind of individual effect. Therefore it is advisable
to employ a within transformation whenever individual effects cannot
be ruled out.
It must be kept in mind that these locally robust procedures have been
designed for situations in which the "other" effect is not of
substantial magnitude, and can behave suboptimally otherwise.
Four tests are available to be chosen through the test
argument: "lml" for "LM lag" and, respectively, "lme"
for "LM error" are the standard, non-robust versions, obtained simply
pooling the cross-sectional versions; "rlml" and "rlme"
are, respectively, the locally robust test for lag, allowing for a
spatial error; and for error, allowing for a spatial lag.
The model argument, specified according to the standards of
plm, is passed on internally and employed to determine the panel
data transformation to be applied before calculating the test. Defaults
to "pooling" (no transformation).