© 2022 IJRAR April 2022, Volume 9, Issue 2 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138) IJRAR22B1003 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 18 Determinants of Balance of Payment: A Comparative Review of Developing and Least Developed Countries Abdul Hadi Sultani 1 Dr. U. Faisal 2 1 Research Scholar, Department of Management Studies, Kannur University, India. 2 Professor, Department of Management Studies, Kannur University, India. Abstract The purpose of this paper is to comparatively review the literature focused on the Balance of Payment (BOP) management in developing countries and Least Developed Countries (LDCs). Though a significant body of literature has explored the impact of various variables on BOP for different countries, they are all in a fragmented manner and have produced contradictory results whether each improves or deteriorates the BOP. Therefore, this study initially compiles a comprehensive index of the main determinants of BOP and then summarizes the dimensions of BOP problems for developing countries and LDCs. Subsequently, it introduces a new typology classifying the BOP indicators into two sets of direct and indirect categories and discusses the importance and application of each. Finally, it compares the impact of identified determinants of BOP on developing countries and LDCs. The main findings indicate that exports and imports, fiscal policy, money supply, inflation rate, structural changes similarly impact the BOP of developing countries and LDCs while liberalization, terms of trade, FDI, exchange rate, loss of confidences investors, stage of developing and quality of infrastructure differently impact their BOPs. Keywords: Balance of Payment, Determinants, Developing Countries, Least Developing Countries (LDCs), Literature Review JEL Classification: F1, F13, M41, O24 I. INTRODUCTION The balance of payment (BOP) represents the history of international transactions (Sujianto, 2020), describes the external economic position, and economic health of a country (Jadhav, 2020). A BOP provides necessary information on the demand and supply of goods, services, and money (Tijani, 2014), and shows the structure of exports, imports, and the labor market of the reporting country. Besides showing how an economy performs in the international market, a BOP performance substantially affects the performance of domestic firms in a