Spillover effects are critical mechanisms in social and economic systems, influencing outcomes across a wide spectrum of social science research. Accurately estimating these effects is essential for policymakers. A major limitation of existing studies is the common assumption of homogeneous spillover effects—treating them as identical across all individuals, firms, or entities. This paper relaxes that restrictive assumption and proposes a more flexible and robust modeling framework for analyzing spillover effects, thereby improving both the accuracy of estimation and the applicability of results across diverse settings. We demonstrate the value of our approach through extensive Monte Carlo simulations and an empirical application to the Chinese liquor industry, where we examine how the sales of liquor producers respond to those of neighboring competitors. Our findings reveal spatial dependence among liquor producers and highlight that the strength of these spillover effects varies with the intensity of competition.