Based on the data of 282 prefecture level cities and 3140 A-share listed companies in China from 2011 to 2019, this paper examines the impact of the development level of digital economy on the total factor productivity of enterprises. The results show that the development of digital economy has significantly improved the total factor productivity of local enterprises. The mechanism test results show that the digital economy can alleviate information asymmetry by reducing corporate management costs, increasing corporate human capital investment and reducing corporate transaction costs, thereby improving corporate total factor productivity. The impact of the development level of digital economy on the total factor productivity of enterprises is heterogeneous, and it has a greater impact on state-owned enterprises, large-scale enterprises, new enterprises, service industries, especially productive service enterprises. This effect is more significant in the eastern region and regions with a high degree of digital economic development. This provides a theoretical basis for exerting the micro-incentive effect of the digital economy and thus promoting the quality of the macro economy.