Abstract: Using the development of digital economy to upgrade industry has become a key task when Anhui province is in an important stage to integrate into the Yangtze River Delta. This paper, taking Anhui province as the research object, constructs the digital economy development and industrial upgrading index system, measures the comprehensive value of the two based on the entropy weight method, and uses panel threshold regression model to study the effects of digital economy development in the whole Anhui province, southern Anhui, middle Anhui and northern Anhui on industrial upgrading from 2012 to 2019. The results show that, on the whole, both the development level of digital economy and the level of industrial upgrading are on the rise, but the regional differences are significant. Specifically, Hefei is the highest among the cities, and southern Anhui is the highest in digital economy level. The development of digital economy can significantly promote industrial upgrading, and this promoting effect has stages. Specifically, the higher the development level of digital economy, the stronger the promoting effect on industrial upgrading; but if there exist big differences between regions, the promoting effect will be reduced.

Key words: digital economy, industrial upgrading, entropy, panel threshold regression model