This paper builds a theory of the shape of the distribution of total-factor productivity (TFP) across countries. The distribution of productivity across countries is arguably twin-peaked in the data, and the proposed theory presents conditions under which twin-peakedness is an equilibrium outcome. We construct a stochastic dynamic general equilibrium model where world growth is endogenous and driven by investments in TFP. All countries invest in TFP in order to increase their productivity, and

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... ach country internalizes the dynamic effects of its own TFP accumulation, i.e., through its own investment. In addition, there are technology spillovers across countries, modeled according to the Nelson-Phelps specification. We find that even under the assumption that all countries have identical technologies for TFP accumulation, the world distribution of TFP across countries can be asymmetric; it is twin-peaked, or bimodal. More specifically, twin-peaked world distributions of TFP arise if the catch-up term in the Nelson-Phelps equation is sufficiently weak. If, on the other hand, technological catch-up is important, the world distribution of TFP is unimodal.