A literature review identifies, summarizes and synthesizes the previously published work on your subject of interest. Your synthesis is key in providing new interpretations of the studies, demonstrating gaps, or discussing flaws in the existing studies. The literature review can be organized by categories or in the order of your research questions/hypotheses.
When you are the researcher:
The literature review establishes your credibility to conduct your study. It indicates your knowledge of the subject and how your study fits into the larger realms of your discipline.
When you are the reader:
The literature review benefits you as the reader by providing an overview of the subject of interest and describing current research. This can be very helpful at the exploration stage when you are developing your ideas. Literature reviews are written in a formal, distinctive style which you will absorb as you read scholarly articles in your field and be able to replicate more easily when you write. The style varies from academic discipline to academic discipline. When you are near the end of your library research, the literature review might be helpful in determining how thorough you have been. You will know if you have included all relevant studies.
For a thorough discussion of literature reviews, see the guide provided by the Writing Center at the University of North Carolina (Chapel Hill) http://writingcenter.unc.edu/handouts/literature-reviews/
--Courtesy of Ann V. Watkins, Dana Library