If you want absolutely the contracted form, your only choice is the disable-output-escaping of xsl:text as linked in the comments above. I think this is a bit dirty, and more, you have to indicate it within a template:
<xsl:template match="/">
<xsl:text disable-output-escaping="yes"><!DOCTYPE html></xsl:text>
</xsl:template>
Alternative cleaner solution, W3C defines for HTML5 a specific DOCTYPE legacy string that can be used by HTML generators which can't display the doctype in the shorter format. So, to stay with pure XSLT you can use:
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="html" doctype-system="about:legacy-compat" />
<xsl:template match="/">
<html>
<head>
<meta charset="utf-8" />
<title>Sample Corporation #1</title>
</head>
<body>
Hello this is a test<br />
Goodbye!
</body>
</html>
</xsl:template>
</xsl:stylesheet>
