Knowledge Spillover (KS) contributes to business innovation and qualifies as an important external asset for consideration in business planning, especially for SMEs because their limitations narrow their capacity for realising their own R&D and flexibility to adapt to opportunities (Mazzarol, 2003; MacMillan, 1975). KS is an unintended transmission of knowledge (Fallah and Ibrahim, 2004) that can be converted into innovation for surrounding companies. KS Channels are the means through which KS happens and leads to innovation within SMEs. Therefore it is important to understand the KS process and its role in SME strategies to enhance their innovation capacity. Thus, the main objective of this paper is to explore KS by revealing the critical channels of KS and their patterns.

However, literature to date indicates it is unclear how KS happens (Paci and Usai, 2009; Audretsch and Feldman, 2004; Feldman, 2000). This paper presents a theoretical frame comprising of fifteen channels of KS that are interrelated as regards the innovation process. These channels are the main elements of analysis in a questionnaire administered in four regions worldwide (North East, Brazil; South East, Ireland; Castilla-La Mancha, Spain; and Bucharest-Ilfov, Romania) with diverse innovation processes.