Abstract
We argue that a federative internal and loosely coupled external network of an multinational corporation (MNC) offer opportunities for recently-formed subsidiaries to become competence-creation nodes at an early stage of their development. By comparing technological knowledge inflow and outflow patterns of subsidiaries in China and counterparts in industrialized countries, we find that subsidiaries in China are not only involved in competence creation, but also contribute to building their MNC's competitive advantage. The results suggest that instead of being 'born dependent', recently-formed subsidiaries in networked MNCs can be 'born interdependent' as competence-creation nodes of MNCs.