Defense R & D Policies, Innovation Capability, and Firm Profitability in Emerging Economies: A Scoping Review

This study maps policy instruments, influence pathways, and research gaps connecting defense research and development (R&D) policies, innovation capability, and firm performance in emerging markets, addressing scattered evidence linking these policies to firm profitability. A scoping review was conducted using PRISMA-ScR guidelines. Open-access Scopus records were screened using a Population-Concept-Context (PCC) framework; 160 records were identified, and 18 studies were included after title, abstract, and full-text assessment. Key instruments identified include public R&D funding, procurement, civil–military integration, offsets, technology transfer, institutional collaboration, cluster or national champion formation, financing support, and business model innovation. These policies are primarily associated with increased R&D intensity, patents, absorptive capacity, technological readiness, commercialization, sales, exports, and productivity. However, direct accounting evidence based on ROA or NPM remains limited, descriptive, or self-reported. This review uniquely synthesizes fragmented evidence on defense R&D policy effectiveness in emerging economies, identifying critical gaps in objective financial performance measurement. Findings guide policymakers in designing evidence-based defense R&D instruments while highlighting the need for standardized accounting metrics to evaluate firm-level outcomes. This research contributes a comprehensive policy-instrument taxonomy and identifies pathways linking defense R&D to innovation and performance, offering a foundational reference for future empirical studies in emerging market contexts.