China’s economy has entered a phase of high-quality development, and the optimization and upgrading of industrial structure has become more urgent and important in the context of accelerating the formation of new quality productivity and promoting the successive transformation of old and new kinetic energy. The advancement of industrial structure relies on the support of a favorable financial environment. In recent years, digital finance, born from the integration of emerging digital technologies and finance, has empowered the high-level development of the industrial structure by stimulating the flow of innovative elements and improving resource allocation. However, existing literature lacks a comprehensive examination of the relationship between the development of digital finance, the integration of factor markets, and the liquidity of capital flows. Particularly, there is a dearth of in-depth research on how digital finance contributes to industrial advancement through enhancing cross-regional capital flow and facilitating the domestic economic cycle. This paper comprehensively references authoritative national reports closely related to digital finance, such as the Development Plan for Financial Technology (FinTech) (2022—2025) issued by the People’s Bank of China. By utilizing Java PDFbox, a digital finance keyword library is constructed, and through text mining and web scraping techniques, the occurrences of digital finance keywords in Baidu News are analyzed for each of the 275 prefecture-level administrative regions annually. This process results in the synthesis of a Prefecture-level Digital Finance Development Index. The research reveals that digital finance significantly promotes the transformation and upgrading of industrial structures, exhibiting varying degrees of impact on the quality and quantity of advanced industrial structures. Mechanism analysis indicates that digital finance plays a significant promoting role in the high-level development of industrial structures through facilitating and strengthening cross-regional capital flows. This conclusion remains robust after conducting endogeneity and robustness tests. Further analysis indicates that the impact of digital finance on the advancement of industrial structures through enhanced cross-regional capital flows exhibits heterogeneity across spatial and developmental stages. The marginal contributions of this paper are threefold. Firstly, at the indicator level, the study compiles important documents related to digital finance, identifies and constructs a keyword library for the digital finance domain, and uses text mining and web scraping techniques with the help of the advanced search system of Baidu News, to build the Prefecture-level Digital Finance Development Index based on the common occurrences of digital finance keywords for each region annually. Secondly, from the research perspective, the paper extensively analyzes the mechanism through which digital finance development affects the transformation and upgrading of industrial structures from the viewpoint of cross-regional capital flows, contributing to a more objective and scientific understanding of the impact of digital finance on industrial structures. Thirdly, in terms of expanding the analysis, the paper further explores the developmental stages and geographical heterogeneity of the impact of digital finance on industrial structures through strengthened cross-regional capital flows. The research conclusions of this paper have significant policy implications for enhancing the efficiency of digital finance in empowering the real economy, facilitating the domestic economic cycle, and accelerating the upgrading of industrial structures.