All hosting utilises a physical Dedicated Server in some shape or form.
In Shared hosting, the resources are split between a lot more people than you will find on vps hosting.
For simply sake, imagine this scenario,
Shared hosting - Dedicated server split into 100 chunks for 100 customers
VPS - Dedicated Server Split into 3 chunks for 3 customers
Dedicated Server - You get the entire thing to yourself.
Of course the split isn't exactly this, but it's for the purpose of this simple explanation.
It is because of this you'll find performance benefits due to the fact that the resources are less contended and are guaranteed.
However, It isn't as simple as that as you may already understand. There are other things that contribute to performance such as the speed of the connection, reliability, the hardware the hosting company is utilising, the way it's optimised etc, the list goes on.