Thats a unique idea.You should consider the following idea to enhance your idea so that it would impact uniquely: The existing theoretical literature provides little justification for a corporate debt subsidy.  illustrate the lfare benefit of this subsidy and study how the social costs and benefits change with the duration of industry distress. In our model, two firms engage in socially wasteful competition for survival in a declining industry. Firms differ on two dimensions: exogenous productivity and endogenously chosen amount of debt financing, resulting in a two-dimensional war of attrition. Debt financing increases incentives to exit, which, although costly for the firm, is socially beneficial. These benefits decline as industry distress shortens. Our normative model sheds light on why the debt tax subsidy still persists around the world. Analogously, the model can also rationalize a seemingly ad hoc feature of the U.S. tax system, which subsidizes the conflict of interest beten debt and equity regarding firm liquidation.  was accepted by Amit Seru, finance.
['Zhiguo He', 'Gregor Matvos']
I am writing a research paper on a idea Debt and Creative Destruction: Why Could Subsidizing Corporate Debt Be Optimal?
[{"from": "human", "value": "I am writing a research paper on a idea Debt and Creative Destruction: Why Could Subsidizing Corporate Debt Be Optimal?"}, {"from": "gpt", "value": "Thats a unique idea.You should consider the following idea to enhance your idea so that it would impact uniquely: The existing theoretical literature provides little justification for a corporate debt subsidy.  illustrate the lfare benefit of this subsidy and study how the social costs and benefits change with the duration of industry distress. In our model, two firms engage in socially wasteful competition for survival in a declining industry. Firms differ on two dimensions: exogenous productivity and endogenously chosen amount of debt financing, resulting in a two-dimensional war of attrition. Debt financing increases incentives to exit, which, although costly for the firm, is socially beneficial. These benefits decline as industry distress shortens. Our normative model sheds light on why the debt tax subsidy still persists around the world. Analogously, the model can also rationalize a seemingly ad hoc feature of the U.S. tax system, which subsidizes the conflict of interest beten debt and equity regarding firm liquidation.  was accepted by Amit Seru, finance."}]