Brokerage and Closure in a Segmented Capital Market: Evidence from Director networks in Poland’s Dual Tier Stock Exchange
Brokerage and Closure in a Segmented Capital Market: Evidence from Director networks in Poland’s Dual Tier Stock Exchange

Summary/Abstract: Purpose: Poland’s Warsaw Stock Exchange (WSE) is divided into the main floor and alternate floor (New Connect). They differ with respect to both regulatory requirements and company types listed. The presented study examined how structural power is shaped within this hybrid institutional environment.Methodology: Drawing on the full WSE data of 500 board members who sat on more than one board, the study compared the main floor only director network to the full director network using non parametric tests. Betweenness centrality was used as a proxy for brokerage, and the clustering coefficient as a proxy for closure.Findings: The results showed that brokerage is more unequally distributed in the full then the main floor only network, directors who were power brokers on the main floor tended to retain their top brokerage positions in the full network, and the tradeoff between cohesion and brokerage was more pronounced in the full network. Taken together this suggests that in hybrid capital market environments top brokerage positions are persistent, concentrated, and that the divide between local cohesion and bridging elites is amplified in the full network.Research limitations: The study relied on cross sectional data, did not include director level covariates, and may have had uneven data quality for the New Connect listed companies. Additionally, although it used known proxies of brokerage and closure, they may have omitted important information on informal power structures.Originality: The study contributes to understanding corporate governance in post socialist economies by offering insight into how structural roles are shaped by evolving market infrastructures.

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