The concept of a regional stock exchange isn't new in American society, but to have one located in Lancaster County is a novel notion.

And amid uncertain times in the global economy, W. Trexler Proffitt Jr. believes focusing on supporting and sustaining local economies is key for investors and the community.

Proffitt, an assistant professor of organizational studies at Franklin & Marshall College, spoke to an audience of 25 people Wednesday night at DogStar Books in Lancaster about the idea of creating LanX, a stock exchange based in Lancaster and devoted to promoting small and midsize local and regional businesses.

Throughout the 19th century, Proffitt said, cities such as Philadelphia, Pittsburgh, Baltimore and Chicago nurtured their own local business activities through a local stock exchange.

"(A stock exchange) was a tool that people used in a particular place and time to generate those cities in their first wave of greatness," Proffitt said.

The discussion, hosted by Susquehanna Sustainable Business Network, focused on the potential benefits and pitfalls of creating a mechanism by which local businesses could generate equity to grow, which Proffitt said could lead to stock exchanges governed at the community level.

Proffitt said the two largest stock markets — the New York Stock Exchange and the NASDAQ — get to make their own rules, which lock out small businesses to maximize equity.

At least $100 million in equity financing is needed to get a listing on the NYSE, Proffitt said, and at least $10 million in equity is needed for NASDAQ to list a company. Smaller businesses can't play the game.

For the past 50 years, Proffitt said, one of the major economic strategies for emerging markets and developing countries advocated by the World Bank and the International Monetary Fund is the creation of stock exchanges.

Proffitt said if the LanX region — which would consist of Lancaster, York, Berks, Dauphin, Lebanon, Cumberland and Perry counties — were to be considered a country, it would be roughly the size of Slovakia and have an economy ranked 80th in the world, with $60 billion generated annually. Slovakia, Proffitt pointed out, has its own stock exchange.

"The size and scale issue begs the question why don't we have (a stock exchange)? What's missing that we choose not to have one on a continuing basis and would it be wise to consider one now," Proffitt said.

Peter Horvath, director of marketing for Shiloh Farms of New Holland, said creating a regional stock exchange would be a positive way to create jobs and to retain money locally.

The amount of money that was pumped into political campaign funds last year shows the "altruistic motives of people," Horvath said, with individuals hoping their candidate would win and make the world better.

Horvath said if those same people used that money to invest in local businesses, they could have an even greater impact on their community.

"There are people right here in Lancaster County who want to make Lancaster County better," Horvath said. "And if you have a good business that would do that, they would rather put their money into that."

Proffitt said Wednesday's discussion was just an "opening salvo of a continuing dialogue in our community" to find the feasibility of a stock exchange.

The next step is the creation of a Web site promoting the LanX concept and more community meetings.

Proffitt said by people not doing business with shady overseas financiers and companies that are not transparent or even visible to the small investor, they can play a stronger role in creating jobs in their own towns. "In the end, it's always about people, it's about trust and it's about relationships," Proffitt said. "There are so many benefits to local interconnectedness that it would be foolhardy to simply not try."

Proffitt will speak at another stock exchange forum at 7 p.m. today at Aaron's Books, 43 S. Broad St., Lititz. The community is invited to attend and ask questions. For more information, contact Lydia Sadauskas or Sam Droke-Dickinson at (877) 500-6552.

E-mail: myoder@lnpnews.com