Abstract：Based on the environmentstrategyperformance paradigm, the paper constructs a theoretical framework on the relationship among government regulations, manufacturing strategy and performance. Using structural equation model and a sample of 135 SMEs in Jiangsu Province, this paper examines the relationship among government regulations, manufacturing strategy and performance, the result of which shows that government regulations have a significant positive effect on cost, quality and innovation; cost, quality and innovation influence financial performance positively and significantly; quality and innovation have a significant positive effect on nonfinancial performance, whereas cost has not. Finally, suggestions of promoting policy for SME development and manufacturing strategy selection are put forward.
2013, Vol. 10 
