This study examines the importance of information technology in order to gain more firm performance and labor productivity with coordination cost as the mediating effect. These variables were built on one theoretical foundations –transaction cost economics (TCE). Specifically, the main purpose of this study is to integrate and explain how IT capabilities can affect the firm output, firm performance and labor productivity. These relationships also tested by using US company between 2011 to 2016 from Information Week and Compustat database. The hypotheses further were tested by using a smartPLS path analysis and time lag effect. The results showed that IT capabilities which is conceptualized as IT spending mostly positive and significant with coordination costs, coordination costs has negative relation with firm performance and positive relation with labor productivity in one-year time lag effect. However, IT has a little effect to labor productivity when it comes to long term effect and positive effect to firm performance. Generally, this study provides some theoretical and practical contributions to IS literature and to managers in US company

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