This paper critically assesses the concept of "localized knowledge spillovers" (LKS) and the debate on the spatial boundaries of spillovers from private and public or academic R&D laboratories. LKS are defined as "knowledge externalities bounded in space," allowing nearby companies to innovate faster than those in other locations. The paper reviews econometric and statistical studies that explore the impact of academic and industrial R&D on local firm innovation activities, using large datasets on innovation inputs and outputs. Despite its popularity, the concept of LKS is criticized for being a 'black box' with ambiguous contents. The authors argue that LKS may distract research on the role of geographical distance in knowledge transmission and lead to naive policy implications. They critique the prevailing interpretation of LKS studies, highlighting logical traps and open questions. The paper discusses the distinction between tacit and codified knowledge, suggesting that tacitness can be a powerful exclusionary device within epistemic communities. It also examines the role of localized worker mobility in knowledge diffusion and the need to explore price and non-price mechanisms for knowledge transfer. The authors conclude by suggesting that rigorous research should consider both locational advantages and diseconomies, as well as the relationship between time and geographical dimensions of spillovers.This paper critically assesses the concept of "localized knowledge spillovers" (LKS) and the debate on the spatial boundaries of spillovers from private and public or academic R&D laboratories. LKS are defined as "knowledge externalities bounded in space," allowing nearby companies to innovate faster than those in other locations. The paper reviews econometric and statistical studies that explore the impact of academic and industrial R&D on local firm innovation activities, using large datasets on innovation inputs and outputs. Despite its popularity, the concept of LKS is criticized for being a 'black box' with ambiguous contents. The authors argue that LKS may distract research on the role of geographical distance in knowledge transmission and lead to naive policy implications. They critique the prevailing interpretation of LKS studies, highlighting logical traps and open questions. The paper discusses the distinction between tacit and codified knowledge, suggesting that tacitness can be a powerful exclusionary device within epistemic communities. It also examines the role of localized worker mobility in knowledge diffusion and the need to explore price and non-price mechanisms for knowledge transfer. The authors conclude by suggesting that rigorous research should consider both locational advantages and diseconomies, as well as the relationship between time and geographical dimensions of spillovers.