ME s ) ▁under ▁different ▁model ing ▁assumptions . ▁ ▁In ▁the ▁empir ical ▁literature , ▁Head ▁et ▁al . ▁( 2 0 0 1 ) ▁show ▁that , ▁from ▁a ▁panel ▁of ▁U . S . ▁and ▁Canada , ▁an ▁increasing ▁returns ▁model ▁where ▁vari eties ▁linking ▁to ▁fir ms ▁predict s ▁H ME s . ▁In ▁contrast , ▁a ▁constant ▁returns ▁model ▁with ▁national ▁product ▁different iation ▁predict s ▁reverse ▁H ME s . ▁Fe en stra ▁et ▁al . ▁( 2 0 0 1 ) ▁also ▁find ▁reverse ▁H ME s ▁in ▁a ▁' reci pro cal - dump ing ' ▁model . ▁Be hr ens ▁et ▁al . ▁( 2 0 0 5 ) ▁further ▁apply ▁to ▁a ▁cross - section ▁of ▁O E CD ▁and ▁non - O E CD ▁countries , ▁and ▁their ▁main ▁finding ▁strongly ▁back s ▁the ▁H ME s ▁prediction , ▁especially ▁between ▁O E CD ▁countries . ▁Hu ang ▁et ▁al . ▁( 2 0 0 7 ) ▁derive ▁the ▁gravity ▁equation , ▁using ▁the ▁U . S . ▁pat ent ▁stock ▁of ▁ 2 0 0 2 ▁for ▁six ▁indust ries , ▁and ▁find ▁that ▁the ▁more ▁the ▁technology ▁intensity ▁of ▁an ▁industry , ▁the ▁higher ▁the ▁effect ▁of ▁the ▁technology ▁advantage ▁to ▁offset ▁H ME s ▁and ▁more ▁likely ▁to ▁reverse ▁the ▁H ME s . ▁ ▁On ▁theoretical ▁side , ▁Davis ▁( 1 9 9 8 ) ▁shows ▁that ▁if ▁both ▁hom ogeneous ▁and ▁differenti ated ▁goods ▁have ▁identical ▁transport