Subsidiaries of multinational corporations are making great efforts to find new markets and secure competitiveness in the local market. Subsidiaries must build various competencies in order to survive while competing with competitors in the local market. In recent years, however, subsidiaries have fostered their own unique competitiveness by developing new technologies, products and processes locally. Local knowledge beyond the accumulated routines in the headquarter has been transferred to company headquarters, evolved into new knowledge, and spread to all subsidiaries, leading to good results. This study defines the organizational tendency focused on local market-oriented experts as center of excellence (CoE) and examines the mediating effect of organizational characteristic on knowledge creation by dividing it into local autonomy and subsidiary role. The hypothesis of this study is that the stronger the CoE of the subsidiary, the more positive its effect is on the creation of local specific knowledge through the mediation effect such as market autonomy, product autonomy, subsidiary position, and vision sharing. In this study, 600 companies were selected through simple random sampling of 4,000 multinational corporations in Korea. Target companies were surveyed via a questionnaire and 279 samples were validated to verify hypotheses. Our hypotheses were verified by the structural equation method and we tested mediation effect using causal mediation analysis. Our results confirmed all the hypotheses.