This paper studies how firms' R&D intensity and two types of spillovers, i.e. R&D spillovers and domestic sales spillovers, affect their domestic sales ratios (the proportion of goods sold domestically). By using survey data of manufacturing firms in China for the period 2001-2006 and applying the quantile regression, we show that R&D intensity has a positive effect on the domestic sales ratio, and the effect declines as the quantile of the domestic sales ratio increases. This is in contrast to traditional wisdom, in which R&D intensity tends to increase export intensity (e.g. Posner, 1961; Vernon, 1966; Barrios et al., 2003). In addition, we show that R&D spillovers and domestic sales spillovers are positive for both local and foreign firms, but their effects vary with quantiles.