The Knowledge Spillover Theory of Entrepreneurship posits that entrepreneurship arises as a response to the commercialization of knowledge that is not fully utilized within incumbent firms. This theory challenges the traditional view that entrepreneurial opportunities are exogenous, arguing instead that they are endogenous to the context in which individuals find themselves. The theory suggests that entrepreneurial opportunities are greater in contexts rich in knowledge but limited in those with impoverished knowledge. The creation of new firms is seen as an endogenous response to investments in knowledge that are not fully commercialized by incumbent firms, facilitating the spillover and commercialization of knowledge. This theory integrates the literature on entrepreneurship and firm strategy by considering entrepreneurship as a cognitive process driven by the recognition of opportunities and the decision to start a new firm. The paper also discusses the role of institutional and social barriers to entrepreneurship and proposes hypotheses on the determinants of entrepreneurship and its impact on economic performance.The Knowledge Spillover Theory of Entrepreneurship posits that entrepreneurship arises as a response to the commercialization of knowledge that is not fully utilized within incumbent firms. This theory challenges the traditional view that entrepreneurial opportunities are exogenous, arguing instead that they are endogenous to the context in which individuals find themselves. The theory suggests that entrepreneurial opportunities are greater in contexts rich in knowledge but limited in those with impoverished knowledge. The creation of new firms is seen as an endogenous response to investments in knowledge that are not fully commercialized by incumbent firms, facilitating the spillover and commercialization of knowledge. This theory integrates the literature on entrepreneurship and firm strategy by considering entrepreneurship as a cognitive process driven by the recognition of opportunities and the decision to start a new firm. The paper also discusses the role of institutional and social barriers to entrepreneurship and proposes hypotheses on the determinants of entrepreneurship and its impact on economic performance.