In the era of digital economy, digital technology innovation has become a core factor driving China''s economic development. Based on the data of China''s A-share listed companies and the list of the top five suppliers and distributors of listed companies from 2009 to 2022, this paper empirically investigates the impact and mechanism of digital innovation in upstream and downstream enterprises of the industrial chain on digital innovation in midstream enterprises by combining IPC patent classification with text analysis and using enterprise digital innovation patents to characterize the level of digital innovation. The research finds that the improvement of digital innovation levels in upstream and downstream enterprises significantly promotes digital innovation in midstream enterprises, indicating a significant positive spillover effect in the industrial chain. This effect is more significant in upstream enterprises, enterprises in the same industry, and enterprises with the same ownership type. Technological knowledge diffusion and market performance incentives are the two channels for the spillover effect. This study reveals the micro-mechanism of spillover effects among upstream, midstream, and downstream enterprises in the industrial chain, providing theoretical references and practical implications for promoting digital innovation and key technological breakthroughs in enterprises, and facilitating the integration of digital economy and the real economy in the industrial chain.