Is the technological capability gap between Hyundai and Mitsubishi converging or diverging? Findings from patent data analysis

With few capabilities in automobile production or development, Hyundai Motors began itsautomobile business in 1967. Hyundai had to surrender a 10% equity stake to receivetechnology transfer from Mitsubishi Motors in 1982. Surprisingly, this situation reversed 20years later, in 2004, when Mitsubishi came to license Hyundai’s engine technology. As of2013, Hyundai is the 5th largest automobile manufacturer in the world, while Mitsubishi isthe 14th. To explain this reversal, this study investigates the technological capability gapbetween Hyundai and Mitsubishi by analysing patents data (and related citations) forHyundai and Mitsubishi to assess their technological capabilities. The study finds thatHyundai not only narrowed the technological capability gap with Mitsubishi, but alsorecently overtook Mitsubishi. The results suggest that Hyundai’s success in the marketwould not be possible without its ceaseless accumulation of technological capabilities.