It is as JJ explained it.
Also, the carburetor design makes a difference.

The two main ideas behind higher performance engines are:
1) Improvement of the "breathing" and air-fuel mixing, which leads to more air-fuel mix into the combustion chamber to produce a more powerful combustion.
2) Reduction of the internal friction among the parts.

The trade-in is a more expensive-complex-heavier engine: better materials, more precise machinning, higher number and complexity of parts.