Purpose – The study seeks to examine the impact of income smoothing (IS) on stock liquidity (SL). Further, it investigates the moderating impact of gender diversity (GD) which is represented by board gender diversity (BGD), and audit committee gender diversity (ACGD) in this relationship.
Design/methodology/approach – The study relies on a quantitative research method to assess the impact of IS on SL and then the moderating impact of GD in (62) Egyptian firms from 2018 to 2021. Panel Data regression analysis and the Kruskal-Wallis's test are run to test the hypotheses.
Findings – The results conclude a significant negative impact of IS on SL. Moreover, this relationship is enhanced by GD where BGD and BGD×ACGD weakens the negative impact of IS on SL. Also, the study demonstrates significant differences among Egyptian Stock Exchange (ESE) sectors regarding IS, besides, there are insignificant differences regarding SL.
Originality/value – This study expands the extant literature by providing novel empirical evidence about the moderating impact of GD on the IS-SL relationship. The study is in line with the growing universal interest in increasing females' participation in boardrooms. Also, the focus of this study is Egypt which has cultural practices and traditional customs toward women. Moreover, the study supports the decisions of regulatory bodies in Egypt to raise the participation of women.