Institutional Quality, Organizational Culture, and the Labour Market Inclusion of People with Disabilities: A Multilevel Conceptual Model of Ethical Business Conduct, Corporate Social Responsibility, and ESG Practices

Abstract

Building on Acemoglu and Robinson's theory of inclusive institutions, this study develops and empirically tests a multilevel model linking institutional quality, organizational culture, and labour market inclusion of people with disabilities through ethical business conduct, corporate social responsibility (CSR), and ESG practices. Institutional quality was assessed using a composite indicator derived from the World Bank's Worldwide Governance Indicators (WGI-CI), while labour market inclusion was measured through the Disability Employment Gap (DEG) and the derived Labour Market Inclusiveness Index (LMII). At the organizational level, the study introduces the Organizational Inclusiveness Index (OII), integrating organizational culture, ethical culture, CSR/ESG implementation, and inclusive employment policies. The empirical analysis covered 30 companies in nine countries. Results show a statistically significant positive relationship between organizational culture and ethical culture, and a strong positive association between institutional quality and average organizational inclusiveness at country level. However, neither the WGI-CI–LMII nor the OII–LMII relationship was statistically significant. The findings therefore support H1 but not H2 in the present sample. The study contributes an original multilevel framework and a composite OII for examining institutional, organizational, and labour market dimensions of inclusion in international comparative research.