Abstract:    The key to the current economic circulation lies in the degree of interconnection between industries in the supply system and the level of innovation capability. As an important link in the internal circulation system, intermediate products play an important role in reducing the output loss of real enterprises and promoting the growth of real economy. This paper explored the relationship between digital economy and intermediate product innovation at a theoretical level. In terms of statistical analysis, this paper used the multiplier effect theory to establish a measurement model to investigate the direct and indirect impact of digital economy on China′s intermediate product innovation. The results showed that: (1) Digital economy plays a positive role in promoting the intermediate product innovation; (2) China′s intermediate product innovation depends heavily on the training of high-quality labor force; (3) Although the introduction of foreign technology can promote China′s intermediate product innovation to  a certain extent, its effect is not significant; (4) Regional economic strength and input ratio have a significant influence on the intermediate product innovation; (5) The production of final products is conducive to promoting the innovation process of intermediate products. These findings will have important policy implications, suggesting that we should increase support for the digital industry, improve the supply of high-quality labor education, strengthen the intensity of investment in domestic intermediate product research and development, reduce excessive dependence on foreign technology, and deepen the application of digital technology in enterprises to release fully the large-scale effect of the domestic consumer market, and complete ultimately China′s industrial upgrading.

Key words: digital economy, intermediate product, innovation value chain, industrial upgrading