This paper explores the relationship between institutional governance quality (IGQ), digital transformation, and corporate social responsibility (CSR) performance in a fragile institutional environment. The study employs an unbalanced panel dataset comprising 473 firm-year observations from firms listed on the Palestine Exchange over the period 2014–2024 and uses fixed-effects regression analysis, robustness tests, and System GMM estimation to ensure the reliability of the findings. The results reveal a significant and robust positive association between institutional governance quality and CSR performance, indicating that higher levels of governance quality are associated with greater corporate engagement in CSR activities. Furthermore, the baseline fixed-effects results show that digital transformation significantly strengthens the positive relationship between institutional governance quality and CSR performance, suggesting that technological progress enhances transparency, information exchange, and institutional monitoring, thereby improving the effectiveness of governance mechanisms in promoting CSR. Robustness tests confirm the stability of the baseline findings, while the dynamic System GMM estimation provides additional evidence after accounting for endogeneity and the persistence of CSR performance. These results indicate that CSR performance exhibits strong persistence over time and that the moderating role of digital transformation becomes more nuanced under a dynamic specification. The study contributes to the literature by providing empirical evidence from a fragile emerging economy that remains underrepresented in governance and CSR research. In addition, the findings offer important policy implications by highlighting the complementary roles of institutional governance quality and digital transformation in promoting CSR and supporting sustainable digital transformation in developing economies.
BinSaddig et al. (Mon,) studied this question.