<p>Cities serve as hubs for the concentration of economic agents, and the interconnectedness and division of labor among them give rise to urban networks. The dynamic mechanisms of urban economic growth are strongly associated with the evolution of urban network externalities, which remain insufficiently examined. Using data from publicly traded companies across 285 Chinese cities between 1990 and 2020, this paper examines the evolution of China’s urban network structure and the spatial heterogeneity of its impacts on urban economic development. The findings reveal three core insights. First, China’s urban network has become increasingly integrated and polycentric, producing network externalities manifested in forms such as borrowed size and agglomeration shadows. These effects are closely linked to spatial connectivity and functional hierarchy, with core cities exerting strong spillovers and intermediary cities acting as crucial bridges. Second, network externalities are positively associated with economic growth and, in the empirical models, show stronger explanatory power than traditional agglomeration effects. While direct effects dominate in the eastern and central regions, western and northeastern cities benefit more through indirect and mediated spillovers, highlighting substantial regional heterogeneity. Third, the interaction between agglomeration and network externalities varies with city size: large cities benefit from specialization and high degree centrality, medium-sized cities gain through intermediary positioning, and small cities, though peripheral, can leverage network integration to access external growth opportunities. These findings offer theoretical and empirical insights into the spatial dynamics of urban externalities and provide policy implications for promoting balanced, connectivity-driven regional development in the post-agglomeration era.</p>