Spatial dynamics of broadband diffusion and digital inclusion: an analytical framework for evidence-based ICT policy in Mexico

This study analyzes spatial disparities in fixed broadband penetration and digital readiness across Mexico's 32 states from 2015 to 2023. Using a balanced panel of 288 state-year observations, we estimate a hierarchical spatial dynamic panel model that captures temporal persistence, regional interdependence, and multivariate technology effects. Inference relies on heteroskedasticity and autocorrelation-consistent (HAC) standard errors, and stationarity diagnostics address potential spurious correlation. Results reveal strong diffusion inertia, with lagged penetration emerging as the dominant determinant of broadband expansion. ICT equipment availability is positively and robustly associated with penetration, underscoring the importance of household digital readiness. In contrast, conditional technology shares (fiber, DSL, and cable modem) show limited short-run associations once persistence is controlled for. Hierarchical clustering identifies eight regional typologies reflecting enduring institutional and infrastructural heterogeneity. Explaining 91.9% of variation, the model highlights path dependence and ecosystem capacity as central factors shaping broadband diffusion in emerging economies.