The impact of cities’ transportation network connections on regional market integration: the case of China’s urban agglomerations

Abstract

Despite growing scholarly attention on the role of urban networks for understanding regional dynamics, there has been limited research examining the impact of cities’ transportation network connections on regional market integration. This paper analyzes China’s four major urban agglomerations: the Yangtze River Delta, the Pearl River Delta, Beijing-Tianjin-Hebei, and Chengdu-Chongqing. Applying a spatial Durbin model to cross-sectional datasets for 2019, we provide insight into the role of cities’ transportation network connections in promoting regional market integration, considering both the potentially heterogeneous impact of network connections and the interplay between network and agglomeration externalities. Our results indicate that: (1) cities’ transportation network connections have an inverted ‘U’-shaped effect on regional market integration; (2) transportation network connections have spatial spillover effects; (3) the positive impact of transportation network connections on regional market integration becomes more pronounced as city size decreases; and (4) there are neither complementary nor substitution effects between network and agglomeration externalities. We reflect on the broader implications of our empirical findings for regional development strategies and discuss possible avenues for further research.