Abstract:Based on combing and summarizing the existing research on relationship embedding, dynamic capabilities, and subsidiary innovation, this paper explores the impact of dual embedding of overseas subsidiaries on innovation performance, proposes theoretical assumptions, builds theoretical models and conducts questionnaire surveys on 205 multinational subsidiaries in China.The empirical research method was used to analyze the obtained data with SPSS24.0 statistical analysis software.The empirical results show that the dual embedding (internal embedding and external embedding) of the subsidiary has a significant positive impact on its innovation performance; dynamic capabilities play an intermediary role in the relationship between dual embedding and innovation performance. Finally, this paper gives the management enlightenment, which aims to provide a certain reference for the practice of Chinese overseas subsidiaries in improving the innovation performance.