This chapter surveys theoretical and empirical literature on non-pecuniary flow of knowledge and the conditions and limitations for firms to ben- efit from positive externalities. Spillovers from the pool of accumulated knowledge generated by technological and scientific development is con- sidered to be a key factor for economic development in modern growth models. Knowledge spillovers has also been a major topic of empirical research on firms' innovation and economic performance over the last thirty years or more. By exploiting theoretical and methodological advances, and using more comprehensive, complex and detailed data sources, scholars from various scientific disciplines have improved the identification of factors, mechanisms, and channels that influence flows of knowledge within and across industries, technological regimes and regions. This research has deepened the understanding of the economic importance of knowledge spillovers.