The article explains the reverse U model's forming and evolution character with the key concepts of the directive technological innovation and in-directive technological innovation,through linear separation on the reverse U relation between firm size and technological innovation,it explains the disputaion between the Schumpeter's hypothesis and reverse U relation in the same analysis frame.Adopting data of Chinese industrial enterprise 1991-2005,we find reverse U model for the firm size and technological innovation,and several linear relationship between the directive,in-directive technological innovation and firm size.The reasult of empirical study shows that the organization inertia of big form has locked effects on technological normal,which does good to the directive technological innovation.While the competitive market is the main factor for small enterprise keep on in-directive technological innovation,the reverse U model represents the comprehensive effect that firm size influences on the two kinds of technological innovations.