For optimal speed with a nested function (function within internal scope of an outer function), I suspect you should use declarations, not expressions.
The question asks about "local functions" and optimization, but doesn't specify how the local functions are created. But it should, because the question's answer probably is different for the different techniques by which the "inner function" can be created.
Looking at the answer and test results by @cleong, I suspect that only his answer is using the optimal technique for function creation. There are three ways to create a function, and @cleong is showing us the one that provides fast execution. The three techniques are:
- constructor
- declaration
- expression
Constructor isn't used much, it requires a string that has the text of the function body. This would be useful in reflective programming, where you do a "toString()" to get the function body, modify, then construct a new function. And that, of course, is more-or-less never done.
Declaration is used, but mostly for outer functions, not inner functions (by "inner function" I mean a function nested within another). Yet, based upon @cleong tests, it seems to be very fast; just as fast as an outer function.
Expressions are what everyone uses. This might not be the best idea; but it's what everyone does.
One major difference between function declarations and function expressions is that the declarations are subject to hoisting. Everyone knows that "var" declarations are hoisted; but so are "function" declarations. For things that are hoisted, computations are performed at compile time to determine the memory space that will be needed for the thing. Presumably, one would expect that the inner function is compiled at compile time, and can run much as would a compiled outer function.
I have a copy of Flannigan's "The Definitive Guide" book from about six years ago, and I remember reading the reverse of what I just wrote here. He said something like: expressions are compiled, and declarations are not. While he is the world's "definitive guide" to JavaScript, I have always suspected he might have gotten this one mixed up and backwards. I suspect that function inner declarations are more "ready to go" than are function expressions. The test results on this stackOverflow page seem to confirm my long held suspicions.
Looking at the @cleong test results, it just seems that declaration, not expression, is the way to go for inner functions, if optimal execution speed is a concern.