Traffic density, congestion externalities, and urbanization in China

Although there is an abundant regional literature analyzing traffic congestion, only a few studies have explored extending such analysis with spatial effects. This study uses a dynamic spatial Durbin model and city-level panel data for the period 2003–14 to investigate the spatial spillover effects of traffic congestion on urbanization in China. The results show that there is an inverted ‘U’-shaped relationship between urbanization and traffic density in local and neighbouring cities, and congestion effects have appeared. In the short and long run, the spatial effects of traffic congestion have become an important force restricting the effective promotion of urbanization in China.