Road transportation is a key component of urban economic systems, enabling the movement of goods, services, and labour while improving market accessibility and productivity. In Lagos State, Nigeria’s commercial hub, road transport remains central to economic activity despite challenges such as congestion, infrastructure deficits, and rapid urban growth. This study examined the role of road transportation systems in facilitating commercial activities and economic growth in Lagos State from 2000 to 2024, within the framework of the Endogenous Growth Theory.

The study adopted an ex-post facto design using annual time-series data from relevant government and statistical sources. Real Gross Domestic Product (RGDP) was used as a proxy for economic growth, while government capital expenditure on road infrastructure, paved road length, vehicle registrations, inflation, and exchange rate served as explanatory variables. Analytical techniques included descriptive statistics, unit root tests, Ordinary Least Squares (OLS) regression, correlation analysis, and Johansen cointegration.

Findings show that road infrastructure investment and transport demand significantly enhance economic growth in Lagos State, while inflation has a negative effect. The results also reveal strong interrelationships among transportation variables and economic performance. Furthermore, cointegration analysis confirms a stable long-run relationship between road transport infrastructure and economic growth, supporting the Endogenous Growth Theory. This indicates that transportation infrastructure acts as productive public capital that improves productivity, reduces transaction costs, and enhances market efficiency.

The study concludes that road transportation systems are vital to sustaining commercial activities and long-term economic growth in Lagos State. It recommends sustained infrastructure investment, improved transport planning, technological innovation in traffic management, and macroeconomic stability as essential conditions for strengthening economic performance and urban development.