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Under the New Pattern of Development, knowledge-based entrepreneurial activities have become avital locomotive for high-quality economic growth. The knowledge spillover theory of entrepreneurship(KSTE)posits that, due to knowledge filters such as organizational inertia, cultural orientation, and resource and capabilities, knowledge-creating organizations as called incumbent organizations are unable to fully commercialize their newly created knowledge. The value embedded in the knowledge is rather realized through venturing behaviors outside the incumbent organizations. As such, this research first overviews the literature related to KSTE by focusing on its two theoretical premises: knowledge filters and knowledge spillovers. Then, this research conducts a comprehensive literature review and organizes this line of inquiry into a framework which includes five parts: levels of analysis, sources and measures of knowledge spillovers, types and measures of knowledge-spillover-based entrepreneurship, factors influencing the process of knowledge-spillover-based entrepreneurship, and outcomes of such entrepreneurial activities. By doing so, this research also uncovers the major limitations of KSTE. Second and more importantly, this research summarizes KSTE studies that were conducted by the research group of digitalization strategy andinnovation at Xi'an Jiaotong University and explicates four theoretical breakthroughs made by this research group:(1)proposes and empirically testes the knowledge spillover theory of entrepreneurship in alliances. It is suggested that partners' knowledge protection can be regarded as an important form of knowledge filters in alliances. As such, this research group extends the theoretical boundary of KSTE and examines the learning paradox in alliances by introducing KSTE from the national level of analysis to organizational and interorganizational levels.(2)This research group proposes and differentiates cultural knowledge filters and capability knowledge filters. Such differences have been investigated in two different countries: the US and India. KSTE has therefore been enriched as different types of knowledge filters have been analyzed.(3)The research group examines how institutional factors such as national institutions, government policy and tax support, government transparency, market competitiveness, and industry technological turbulence can function as boundary conditions for KSTE. In addition, the interaction effects between these institutional factors have also been examined. By doing so, the theoretical boundaries of KSTE have been specified.(4)The research group develops a novel concept of national entrepreneurial values and examines its moderating role in the link between national knowledge creation and employee venturing behaviors. In this case, this research group is able to empirically examine the core theoretical relationships at the national level. Finally, this research develops several promising research directions based on the main limitations of this line of literature. In a nutshell, KSTE posits that knowledge filters are barriers that can block the transformation of organizational knowledge to commercialized knowledge, suggests that entrepreneurship especially employee venturing behaviors is an important mechanism that can penetrate knowledge filters, and argues that entrepreneurship becomes an importantconduit of knowledge spillovers. All these important propositions of KSTE are aligned perfectly with the main ideas of knowledge economy that emphasizes the creation, sharing, and exploitation of knowledge. Therefore, KSTE becomes an important conduit through which to show how knowledge at the national and organizational levels can promote economic growth and enhance social welfare. [ABSTRACT FROM AUTHOR]