I don't have a clue, although I'd guess that the vast majority of defense spending goes to companies here in the U.S. The effect of military spending seems to be the basis of the old saying I learned when I was in the Army regarding investing during a time of war. It went something like, "Buy on bullets, sell on bugles", meaning buy when the war starts and sell when the armistice is signed. The saying is a little counter-intuitive--most people get nervous about the markets when war is begun-- but the economy and defense contractors get a bump as long as we're at war.