In the context of fierce competition and rapidly changing market environments, new product development has become a key source of competitive advantage for firms. However, new products are accompanied by uncertainty in realizing their value in the market and carry higher levels of risk compared to existing products. This study classified new product types into radical new products and incremental new products, and analyzed the impact of new product development on firm value according to the type of innovation. Furthermore, it empirically verified whether this impact varies depending on the market reputation of the firm that developed the new product. To test the hypotheses, data on new product development, firm value, and reputation were collected for firms in the pharmaceutical industry, and panel data covering the period from 1997 to 2010 were constructed and analyzed. According to the analysis results, radical new products had a positive effect on firm value, whereas incremental new products did not have a significant effect on firm value. Additionally, firm reputation was found to positively moderate the effect of new product development on firm value only in the case of radical new products. This study advances prior research findings that new products positively affect firm value by demonstrating that firm value may not increase depending on the innovation type of the developed new product, and that the extent to which firm value increases can also vary depending on the firm's reputation. Accordingly, this study has implications for corporate management in that it highlights the importance of corporate reputation management in the effect of new product development on firm value.