Abstract Purpose The upgrading of Chinese enterprises is an important issue with theoretical and practical significance in the field of management in recent years, but the existing research does not pay enough attention to the role of entrepreneurship in enterprise upgrading. Based on the literature review and under the guidance of relevant theories, this research establishes the conceptual model of “entrepreneurship-enterprise upgrading-enterprise performance” and related hypotheses in the studies of the following three issues: the impact of entrepreneurship on enterprise performance; the impact of entrepreneurship on enterprise upgrading and the mechanism by which entrepreneurship influences enterprise performance through enterprise upgrading. Research methodology This research follows the classic quantitative research approach. Data come from a questionnaire survey with a sample of 152 validated returns from the manufacturing enterprises in Hunan Province China. The data were analyzed by exploratory factor analysis, confirmatory factor analysis and multiple regression analysis. Findings It is found that: (1) Innovation of entrepreneurs has a significant positive impact on enterprise performance. Risk-taking of entrepreneurs has a significant positive impact on enterprise performance. (2) Innovation of entrepreneurs has a significant positive impact on product upgrading, process upgrading, and production as service; risk-taking of entrepreneurs has a significant positive impact on product upgrading, process upgrading, and production as service. Risk-taking of entrepreneurs plays a greater role in enterprise upgrading. (3) Both product upgrading and process upgrading have a significant positive impact on enterprise performance while production as service has no significant positive impact on enterprise performance. Among them, product upgrading has the greatest impact on enterprise performance. (4) Innovative spirit and risk-taking of entrepreneurs in entrepreneurship has effect on enterprise performance through enterprise upgrading. Product upgrading, process upgrading, and production as service play a mediating role between innovation of entrepreneurs and enterprise performance and between entrepreneurs’ risk-taking and enterprise performance respectively. Research limitations The questionnaire survey was conducted by a convenience sampling strategy. Sample was collected by the researcher’s personal and business networks mainly in Hunan Province, China. This may raise concerns on the issues of representativeness and coverage. Readers should be carefully in generalizing the findings. Keywords Entrepreneurship, Enterprise upgrading, Product upgrading, Process upgrading, Enterprise performance