Vigorously developing the digital economy is a critical task for accelerating the construction of a manufacturing powerhouse,while enhancing innovation performance is an important measure to promote the upgrading of China’s manufacturing structure. Based on China’s provincial panel data and data from Shanghai and Shenzhen A-share listed companies for the period 2011-2020,this study employs spatial simultaneous equations and the generalized spatial three-stage least squares (GS3SLS) to empirically analyze the pathways and mechanisms through which the digital economy influences the upgrading of the manufacturing structure. The research findings indicate that,in terms of pathways,the digital economy not only impacts local manufacturing structure upgrading but also exhibits significant spatial spillover effects,indirectly driving the structural upgrading of manufacturing in neighboring regions. In terms of mechanisms,the digital economy promotes manufacturing structure upgrading by enhancing the scale efficiency of innovation.