This paper examines the impact of local financial development on economic growth within an integrated financial market. The authors construct a new indicator of financial development by estimating the regional effect on the probability that a household is denied access to credit. Using this indicator, they find that financial development increases the likelihood of individuals starting their own businesses, encourages entry, enhances competition, and promotes firm growth. These effects are more pronounced for smaller firms, which have difficulty raising funds outside their local areas. Overall, the results suggest that local financial development is a significant determinant of economic success, even in an environment with no capital mobility constraints. The study uses Italy as a case study, given its long history of political and regulatory integration, to provide evidence that local financial development matters for growth, even in a highly integrated market.This paper examines the impact of local financial development on economic growth within an integrated financial market. The authors construct a new indicator of financial development by estimating the regional effect on the probability that a household is denied access to credit. Using this indicator, they find that financial development increases the likelihood of individuals starting their own businesses, encourages entry, enhances competition, and promotes firm growth. These effects are more pronounced for smaller firms, which have difficulty raising funds outside their local areas. Overall, the results suggest that local financial development is a significant determinant of economic success, even in an environment with no capital mobility constraints. The study uses Italy as a case study, given its long history of political and regulatory integration, to provide evidence that local financial development matters for growth, even in a highly integrated market.