Localized competition in the knowledge spillover theory of entrepreneurship

► We extend and generalize the knowledge spillover theory of entrepreneurship. ► We posit that entrepreneurs and incumbents compete for knowledge spillovers. ► We test our conjectures empirically and find support for the key hypotheses. ► We find high tech entrepreneurship in a given region increases with the creation of knowledge. ► We find that localized competition for knowledge negatively moderates this relationship.