Does Road Infrastructure Close or Widen the Urban–Rural Divide? Evidence from China’s Lanxi Urban Agglomeration

Transportation infrastructure is often viewed as a driver of regional convergence, yet its distributional consequences remain empirically unsettled. This study examines the direct and spatial spillover effects of road network density on urban–rural income inequality across 44 counties in the Lanxi (Lanzhou–Xining) Urban Agglomeration (2013–2022), a key development cluster in the upper reaches of the Yellow River Basin in Northwest China. By employing a Spatial Durbin Model with two-way fixed effects and three alternative spatial weight matrices (inverse geographic distance, economic distance, and an economic–geographic nested specification), we decompose total effects into direct and indirect components. The results indicate that the inequality effect of road density is specification-dependent: under the baseline geographic matrix, road density shows no robust inequality-reducing effect, while its spillover effect becomes significantly negative when spatial dependence is defined by economic similarity (p < 0.05). In contrast, local government health expenditure—a fiscal proxy for public service provision—exhibits a consistently negative association with urban–rural income inequality across all specifications, with statistically significant direct and total effects. These findings suggest that physical connectivity is a necessary but insufficient condition for inclusive growth; fiscal commitment to public services—particularly healthcare—appears to represent a key constraint for urban–rural convergence in topographically complex, ecologically sensitive regions.