Local governments' responses to the environmental target responsibility system: Evidence from Chinese prefectures.

[Display omitted] • The ETRS significantly cut SO 2 emissions and related activities. However, non-targeted air pollutants were unaffected. • The ETRS reduced more polluting activities in the state sector, but it caused more firm shutdowns in the private sector. • Encouraging efforts on environmental protection crowded out efforts on economic growth. [ABSTRACT FROM AUTHOR]