Application of a combination production function model

In the analysis of economic growth factors, people often use the production function to analyze the contribution rate of the influencing factors of economic growth. The commonly-used production functions include C–D production function, CES production function and VES production function; the analysis result of three production functions always differ a lot; in order to reduce the difference and increase the reliability of the analysis, this paper combines with three production function models, utilizes the principal component regression, and obtains the composite production function model. Based on the composite production function model, a method which is used to calculate the contribution rate of the economic growth factors is proposed in this paper; based on this method, the deficiencies of Solow’s calculation formula are overcome, and the precision estimation is improved. Finally, according to the given method in this paper, the empirical analysis is made on the contribution rate of the economic growth factors for the tertiary industry in China.