Leveraging CSR, transparency, and innovation strategies for superior financial performance in Palestine’s listed companies

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Abstract

Ensuring the sustainable financial performance of publicly traded companies in conflict zones, such as Palestine, is crucial, especially in the aftermath of the financial crisis caused by COVID-19 and related sanctions (Antorine et al., 2025). This study examines the impact of corporate social responsibility (CSR) activities on the financial performance of these companies, with a focus on the roles of frugal innovation, innovation ambidexterity, and organizational transparency. This study used a cross-sectional design to collect primary data from 179 participants, including chief executive officers (CEOs), chief financial officers (CFOs), and finance managers of publicly traded companies in Palestine. Data analysis was conducted using partial least squares structural equation modeling (PLS-SEM) and SmartPLS software. The present study revealed that CSR activities and organizational transparency have a positive relationship with sustainable financial performance. Innovation ambidexterity mediates, but frugal innovation does not mediate, between CSR activities and the sustainable financial performance of listed companies in Palestine. Organizational transparency positively moderates between CSR activities and innovation outcomes (innovation ambidexterity and frugal innovation). This study broadens the boundary of knowledge by examining the effect of CSR activities, frugal innovation, innovation ambidexterity, organizational transparency, and their interplay on the sustainable financial performance of listed companies in Palestine through legitimacy theory.

Keywords: CSR Activities, Frugal Innovation, Innovation Ambidexterity, Organizational Transparency, Sustainable Financial Performance, Conflicted Zones

Authors’ individual contribution: Conceptualization — M.A.A.A., A.R.M.A., and M.I.H.K.; Methodology — M.A.A.A., A.R.M.A., and M.I.H.K.; Validation — M.A.A.A., A.R.M.A., and M.I.H.K.; Formal Analysis — M.A.A.A.; Investigation — M.A.A.A., A.R.M.A., and M.I.H.K.; Resources — A.R.M.A. and M.I.H.K.; Data Curation — M.A.A.A.; Writing — Original Draft — M.A.A.A.; Writing — Review & Editing — M.A.A.A., A.R.M.A., M.I.H.K.; Visualization — M.A.A.A.; Supervision — A.R.M.A. and M.I.H.K.; Project Administration — A.R.M.A. and M.I.H.K.; Funding Acquisition — M.A.A.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: M1, M2

Received: 30.01.2025
Revised: 21.05.2025; 24.10.2025
Accepted: 05.11.2025
Published online: 07.11.2025

How to cite this paper: Abusafia, M. A. A., Ariffin, A. R. M., & Kamaruddin, M. I. H. (2025). Leveraging CSR, transparency, and innovation strategies for superior financial performance in Palestine’s listed companies. Corporate Governance and Sustainability Review, 9(4), 19–32. https://doi.org/10.22495/cgsrv9i4p2