Oh, you mean in a wider context? Yes, imagination definitely necessary,
and
I think a good dose of research doesn't come amiss either.
I've never forgotten Katharine Hepburn in "Holiday" (a memorable but not subtle performance--sort of like Bayban the Butcher with cheekbones) saying that if her theoretical husband wanted to sell peanuts for a living, "Oh, how I'll believe in those peanuts." I think for me, a story works to the degree that the author really believes in...space battles, or Travis' bleak internal landscape, or how to set up a rebel base, or her favorite smarm pairing or...well, whatever.
However, I'd say that research is less important than imaginative consistency. As Neil says, there are plenty of things that you'd never believe even though they really did happen--I think that a story works better if it's about things you believe even though they couldn't really happen.
-(Y)