Granger Causality Test between Oil Consumption and Gross Domestic Product of China Based on the Provincial Panel Data Analysis

This paper, based on the Provincial Panel Data of 30 provinces during 1995~2010 period, applies the panel unit root, heterogeneous panel co-integration and panel based error correction models to re-investigate co-movement and the causality between oil consumption and GDP. The results show that there is one-way directional causality from energy consumption to GDP in the western area, and one-way causality from GDP to energy consumption in the central area, while no causality between energy consumption and GDP exists in the eastern area.