Research on the production function to investment behaviour

Yujing Chu

Abstract

The purpose of the business existence is to make profit maximization. Production function is relational expression that a certain kind of factor inputs can bring a maximum output under determine the conditions and the technical level. In this paper, we get the enterprise expansion path by deducing the production function. And find investment behavior model based on expansion path. By building a model and regress analysis, it is exact to reproduce and interpret appropriate investment behavior of Chinese macro economy the model comprises labor income, corporate earnings and government spending.